Venice Digs

This is the $24,000 question of the moment. There are many signs on the local front that prices are leveling and activity is picking up. However, there is nothing to indicate that prices will be escalating in the near future. What I am seeing is a quicker reaction by buyers to well-priced, good condition properties. There have even been multiple offers and a couple of properties last month that sold over asking.

Looking at the July stats (see below), the level of sales remained fairly high and about the same as last month and a year ago … In July 2009 16 single family homes, 4 income properties and 7 condos sold, last month’s numbers were 18-3-7 and the July 2008 totals were 16-3-2, respectively.

When I compare the single family home stats for July vs June 2009, there is very little change in average sale price and average price per square foot … but there is still a significant drop when comparing to last July.

The Multiple Listing Service statistics as of August 13th show Venice listing inventory increased by 8 since last month to 111 active single family homes for sale. The average days on market for the current listings remained about the same at 117 days from 118 days a month ago. Of the 111 current listings, 45 (40.5%) are listed below last month’s average sale price of $1,053,055 and 66 (59.5%) are listed above that average sale price. The average list price for the active listings is $1,406,207 … 33.5% above June’s average sale price.

Currently 20 single family homes are in escrow (average days on market is 84). This is quite a bit off a month ago when there were 28 homes in escrow with an average DOM of 67. This indicates that there may be a drop in number of closed sales in August and September. The average list price for the homes in escrow is $1,191,200.

First-time homebuyers (those who have not owned a home for at least three years) may be eligible for the $8,000 federal tax credit, but the window of opportunity is closing rapidly. To qualify for the credit, the buyer must close escrow by midnight on November 30th, when the tax credit expires. Buyers hoping to take advantage of this benefit are advised to start house-hunting early, as the buying and lending processes takes time.

Finding the right house can take some time, so we recommend home buyers start looking for a home as soon as they are able and ready to purchase.  Buyers also should build in extra time to accommodate the lending process, which is taking approximately two weeks longer to process this year compared with last year.

The tax credit is equal to 10 percent of the purchase price, up to $8,000, subject to income limits. Single taxpayers are eligible if their modified adjusted gross income is $75,000 or less, while married taxpayers filing jointly must have a modified adjusted gross income of $150,000 or less.

Only primary residences are eligible for the federal tax credit, including new or existing single-family homes, townhouses, condominiums, manufactured homes, custom homes, and houseboats. Vacation homes and investment properties do not qualify.

Purchases must be arm’s-length transactions, meaning the seller cannot be the buyer’s parent, grandparent, child, grandchild or spouse.

Married people filing as such cannot claim the credit if either spouse has owned a primary residence within the last three years. However, unmarried joint purchasers may allocate the credit in any way they see fit, as long as it does not exceed the $8,000 maximum.

The government will allow those who finance their purchases with a federally insured loan to apply their anticipated credit immediately toward closing costs or as additional down payment, rather than waiting until they file their 2009 taxes to receive the refund.