WASHINGTON — Senate negotiators agreed Wednesday to extend a popular tax credit for first-time homebuyers and to offer a reduced credit to some repeat buyers.
The tax credit, which provides up to $8,000 to first-time homebuyers, is set to expire at the end of November.
Senators agreed to extend the existing tax credit for first-time homebuyers while offering a reduced credit of up to $6,500 to repeat buyers who have owned their current homes for at least five years, said Regan Lachapelle, a spokeswoman for Senate Majority Leader Harry Reid, D-Nev.
The tax credits would be available to homebuyers who sign sales agreements by the end of April. They would have until the end of June to close on their new homes, said a congressional aide, who spoke on condition of anonymity because he was not authorized to publicly discuss the deal.
Senators were still negotiating the expansion of a separate tax credit that lets money-losing businesses get refunds for taxes paid in previous years, providing them with an immediate source of cash.
Senators in both political parties were hoping to add both tax provisions to a bill that would give people running out of unemployment insurance benefits up to 20 more weeks of federal aid. The Senate could vote on the overall bill as early as Thursday, but lawmakers were still haggling over several unrelated amendments Wednesday evening.
Popular bills like the one to extend unemployment benefits often attract amendments that would have a difficult time passing on their own.
Republicans were demanding that they be given a chance to offer amendments to restrict federal aid to the beleaguered community activist group ACORN and on requiring that people receiving unemployment insurance be processed through E-Verify, an Internet-based system that employers use to check on the immigration status of new hires.
Majority Democrats have refused to add the amendments.
Showing posts with label first-time homebuyers. Show all posts
Showing posts with label first-time homebuyers. Show all posts
October 29, 2009
September 1, 2009
Limited Time Offer
Falling materials prices, increased competition have led to lower overall construction costs
Business First of Louisville - by Kevin Eigelbach Staff Writer
There’s an unadvertised sale going on in the construction industry.
Normally, the winning bid for a construction project doesn’t fall below the engineer’s or architect’s estimate of what the project will cost. But that’s happening regularly now, said Dan Noonan, the chief estimator for Whittenberg Construction Co., 4774 Allmond Ave.
“Jobs are coming in at 25 to 30 percent under budget,” Noonan said.
According to Noonan, some clients can save millions on projects as a result of more-competitive bidding and falling prices for some construction materials.
For instance, Whittenberg bid in July on a project to build a campus recreation center at Morehead State University — a project the university budgeted at $26 million. Whittenberg bid $18.9 million, but Cincinnati-based Dugan & Meyers Construction Co. won the contract with a bid of $17.8 million, Noonan said.
“People are just trying to keep busy and keep the doors open,” Noonan said of his fellow contractors
A recent project to renovate the University of Louisville’s Kersey Library, which was budgeted for $6 million, attracted a low bid of $3.4 million and a high bid of $3.6 million, said John Brasch, president of Brasch-Barry General Contractors Inc., 901 Lampton St.
“If someone wanted to build a new building ... probably the cheapest price they could get between now and eternity is today,” Brasch said.
Oversupply of contractors
The “sale” is happening because of two trends in construction. First, the cost of construction materials has fallen drastically, which means contractors can complete projects cheaper.
Second, there is an abundant supply of contractors who need work and are willing to work for less.Sixteen contractors bid on the University of Louisville project, which in normal times would have attracted about six, Brasch said. Early this year, his company went to a pre-bid meeting for a school construction project that attracted 25 general contractors.
“We returned the plans,” he said. “We’ve stopped bidding on public jobs for the time being.”
Preparing a bid takes a lot of time and effort, Brasch said. Most of the projects his company bids on cost from $1,000 to $5,000 just for the bid, he said, and only one bid in five, at best, are successful.
The same trend of too many contractors chasing too few jobs holds true nationally, said Kenneth Simonson, chief economist for the Associated General Contractors of America, an Arlington, Va.-based construction advocacy group.
“Where we used to see two or three bidders for a public job, now they tell me there are 20 or 30,” Simonson said. “And the winner will offer to do (the job) at cost.”
Lack of demand = cheap materials
The lack of demand for new construction also has caused the price of common building materials such as wood and steel to fall, which is another factor that makes it a good time to lock in bids on a construction project.
For example, the average price nationally for 1,000 board feet of the lumber used for framing structures was $238 on Aug. 14, compared with $282 a year earlier, according to Random Lengths, a Eugene, Ore.-based lumber-industry newsletter.
In March, the price fell as low as $195 per 1,000 board feet, which was the lowest price since February 1986, when the price was $187 per 1,000 board feet, associate editor Tim Cochran said.
The current price would look even worse, relative to historic prices, if it were adjusted for inflation, he said.
“Lumber is very inexpensive now,” said Chris Quinn, the executive vice president of the Louisville-based Kentucky Building Materials Association, 201 Townepark Circle, which represents suppliers of lumber and other building materials.
“If a person has the desire and the financial capability, now is an absolutely perfect time to build a house,” he said.Other construction materials also have dropped from a year ago. For example, copper futures were trading at $4 a pound in July 2008, which was an all-time record. But they fell to $2.50 per pound last month, Simonson said.The U.S. producer price index for materials and components for construction stood at 202.2 in June, a 2.1 percentage point drop from June 2008.
Simonson said he believes that overall, the cost of construction materials for 2009 will fall about 4 percent from what they were last year’s levels.
Normally, materials prices are lowest in the winter months, and they spike around March as customers get eager to start construction, Brasch said. But that spike didn’t happen this year until May, he said, and prices since have fallen back.
He is skeptical that the low prices will mean more construction projects, however.
“It’s like the stock market. If you study it, the time to buy is right now,” Brasch said.
“But only the really smart people do that,” he said. “The average Joe only wants to do that when the market is rocking and rolling.
“It’s the same with construction. They are doing it because they have a need, not because prices are cheap. When people are worried about what’s going to happen, they freeze things,” he said.
Situation growing dire
The sale prices for construction projects really are a limited-time offer, Simonson said, because prices could spike next year. And the recession could force many contractors out of business, which might make it less of a buyers’ market.
He has not heard of many general contractors going out of business yet, he said, but many still are finishing projects they began a year ago.
“The situation is getting increasingly dire,” he said. “There are signs of life in the single-family home-building market, but for the multiple-family and nonresidential, the downturn is continuing and even accelerating.”
From January through April, in terms of getting new contracts, business at Brasch-Barry was down about 75 percent from the same period last year, Brasch said.
The company laid off three office employees and six field employees, he said, the first layoffs in the company’s 20-year history.
Since May, however, the pace of attracting new business has picked up, he said, and the company has hired back one office employee and three of the field employees it laid off. The company now has nine office and 38 field employees, he said. This year, he expects revenue to be down about 30 percent from last year’s $44 million.
Revenue at Whittenberg also will be down this year, Noonan said, but it’s hard to say by how much. Last year, the company billed $57 million worth of work, according to the Business First list of general contractors, which was published May 1. Noonan would not comment about whether the company had laid off anyone this year.
The original article can be found at http://louisville.bizjournals.com/louisville/stories/2009/08/24/focus1.html?b=1251086400^1963061&page=2
Business First of Louisville - by Kevin Eigelbach Staff Writer
There’s an unadvertised sale going on in the construction industry.
Normally, the winning bid for a construction project doesn’t fall below the engineer’s or architect’s estimate of what the project will cost. But that’s happening regularly now, said Dan Noonan, the chief estimator for Whittenberg Construction Co., 4774 Allmond Ave.
“Jobs are coming in at 25 to 30 percent under budget,” Noonan said.
According to Noonan, some clients can save millions on projects as a result of more-competitive bidding and falling prices for some construction materials.
For instance, Whittenberg bid in July on a project to build a campus recreation center at Morehead State University — a project the university budgeted at $26 million. Whittenberg bid $18.9 million, but Cincinnati-based Dugan & Meyers Construction Co. won the contract with a bid of $17.8 million, Noonan said.
“People are just trying to keep busy and keep the doors open,” Noonan said of his fellow contractors
A recent project to renovate the University of Louisville’s Kersey Library, which was budgeted for $6 million, attracted a low bid of $3.4 million and a high bid of $3.6 million, said John Brasch, president of Brasch-Barry General Contractors Inc., 901 Lampton St.
“If someone wanted to build a new building ... probably the cheapest price they could get between now and eternity is today,” Brasch said.
Oversupply of contractors
The “sale” is happening because of two trends in construction. First, the cost of construction materials has fallen drastically, which means contractors can complete projects cheaper.
Second, there is an abundant supply of contractors who need work and are willing to work for less.Sixteen contractors bid on the University of Louisville project, which in normal times would have attracted about six, Brasch said. Early this year, his company went to a pre-bid meeting for a school construction project that attracted 25 general contractors.
“We returned the plans,” he said. “We’ve stopped bidding on public jobs for the time being.”
Preparing a bid takes a lot of time and effort, Brasch said. Most of the projects his company bids on cost from $1,000 to $5,000 just for the bid, he said, and only one bid in five, at best, are successful.
The same trend of too many contractors chasing too few jobs holds true nationally, said Kenneth Simonson, chief economist for the Associated General Contractors of America, an Arlington, Va.-based construction advocacy group.
“Where we used to see two or three bidders for a public job, now they tell me there are 20 or 30,” Simonson said. “And the winner will offer to do (the job) at cost.”
Lack of demand = cheap materials
The lack of demand for new construction also has caused the price of common building materials such as wood and steel to fall, which is another factor that makes it a good time to lock in bids on a construction project.
For example, the average price nationally for 1,000 board feet of the lumber used for framing structures was $238 on Aug. 14, compared with $282 a year earlier, according to Random Lengths, a Eugene, Ore.-based lumber-industry newsletter.
In March, the price fell as low as $195 per 1,000 board feet, which was the lowest price since February 1986, when the price was $187 per 1,000 board feet, associate editor Tim Cochran said.
The current price would look even worse, relative to historic prices, if it were adjusted for inflation, he said.
“Lumber is very inexpensive now,” said Chris Quinn, the executive vice president of the Louisville-based Kentucky Building Materials Association, 201 Townepark Circle, which represents suppliers of lumber and other building materials.
“If a person has the desire and the financial capability, now is an absolutely perfect time to build a house,” he said.Other construction materials also have dropped from a year ago. For example, copper futures were trading at $4 a pound in July 2008, which was an all-time record. But they fell to $2.50 per pound last month, Simonson said.The U.S. producer price index for materials and components for construction stood at 202.2 in June, a 2.1 percentage point drop from June 2008.
Simonson said he believes that overall, the cost of construction materials for 2009 will fall about 4 percent from what they were last year’s levels.
Normally, materials prices are lowest in the winter months, and they spike around March as customers get eager to start construction, Brasch said. But that spike didn’t happen this year until May, he said, and prices since have fallen back.
He is skeptical that the low prices will mean more construction projects, however.
“It’s like the stock market. If you study it, the time to buy is right now,” Brasch said.
“But only the really smart people do that,” he said. “The average Joe only wants to do that when the market is rocking and rolling.
“It’s the same with construction. They are doing it because they have a need, not because prices are cheap. When people are worried about what’s going to happen, they freeze things,” he said.
Situation growing dire
The sale prices for construction projects really are a limited-time offer, Simonson said, because prices could spike next year. And the recession could force many contractors out of business, which might make it less of a buyers’ market.
He has not heard of many general contractors going out of business yet, he said, but many still are finishing projects they began a year ago.
“The situation is getting increasingly dire,” he said. “There are signs of life in the single-family home-building market, but for the multiple-family and nonresidential, the downturn is continuing and even accelerating.”
From January through April, in terms of getting new contracts, business at Brasch-Barry was down about 75 percent from the same period last year, Brasch said.
The company laid off three office employees and six field employees, he said, the first layoffs in the company’s 20-year history.
Since May, however, the pace of attracting new business has picked up, he said, and the company has hired back one office employee and three of the field employees it laid off. The company now has nine office and 38 field employees, he said. This year, he expects revenue to be down about 30 percent from last year’s $44 million.
Revenue at Whittenberg also will be down this year, Noonan said, but it’s hard to say by how much. Last year, the company billed $57 million worth of work, according to the Business First list of general contractors, which was published May 1. Noonan would not comment about whether the company had laid off anyone this year.
The original article can be found at http://louisville.bizjournals.com/louisville/stories/2009/08/24/focus1.html?b=1251086400^1963061&page=2
August 13, 2009
Louisville's area's home sales rise sharply in July
Article written by: By Gregory A. Hall • ghall@courier-journal.com • July 28, 2009
Buoyed by the $8,000 federal tax credit for first-time homebuyers , Louisville-area home sales so far this month are up sharply over the same period a year ago.
The improvement — coming on the heels of June numbers showing an uptick over May — is an indication that as the nation's housing market shows signs of recovering, Louisville is gaining with it.
“The first-time homebuyers are making a huge, huge dent in the market,” said Jan Scholtz, president of the Greater Louisville Association of Realtors.
Sales through Monday were up 27 percent over the same period a year ago, said Lisa Stephenson, executive vice president of the Realtors association.
The 1,042 homes sold in July through Monday had already exceeded the 1,015 for the entire month last year, she noted.
Both nationally and locally, the tax credit is being cited as a significant factor in the market's improvement.
The credit is part of the federal stimulus package passed in February and applies to homes bought before Dec. 1.
Realtors say the hope is that as first-time homebuyers help the low end of the market, existing homeowners will be able to sell and move into larger quarters, stimulating sales among the higher-priced homes.
Joe Simms, owner of the Joe Simms Group RE/MAX Associates in eastern Jefferson County, said he tried Tuesday to set up appointments for a client and found four of the seven homes he planned to show had sold.
Because so many of the buyers have been purchasing starter homes, prices still are down, he said, but still, “we've been real busy. … We've had a great month, and I think most of it's due to the $8,000 tax credit.”
Earlier this month, the Louisville Realtors group, which draws chiefly from Jefferson, Bullitt and Oldham counties, reported its members sold 1,175 homes in June, the most since a year earlier and only 1.3 percent fewer than June 2008.
Southern Indiana Realtors reported selling 285 homes in June, a 13 percent increase from a year earlier.
Scholtz said she expects the local market to grow in coming months because consumers are more confident than they were when the housing and financial crises developed. “It's going to continue to gain like this,”Scholtz said. “We are going crazy selling houses to first-time homebuyers.”
Stephenson did not reveal median price figures for July, but agreed with Simms that prices are not up. With so much of the recent activity being among lower-priced homes, median prices haven't been as quick to rebound.
Nationally, sales of new homes rose by the largest amount in more than eight years last month, according to a Commerce Department report this week. Sales rose 11 percent in June to a seasonally adjusted annual rate of 384,000, from an upwardly revised May rate of 346,000, the government reported.
Low prices and historically low interest rates —– averaging 5.20 percent nationally for a 30-year fixed rate —– have also contributed to sales increases.
“The worst of the housing recession,” said David Resler, chief economist at Nomura Securities, “is now behind us.” And as with the overall economy, the “recovery” is likely to be slow and arduous, he said.
Last week, the National Association of Realtors said that sales of existing homes posted a monthly increase of 3.6 percent in June.
Also, home prices in May posted their first monthly increase nationwide since the summer of 2006, according to data released Tuesday in the Standard & Poor's/Case-Shiller home price index of 20 major cities. The index rose 0.5 percent from April, but was still 17.1 percent below May of last year.
Louisville is not part of the index, but Realtors' figures showed a median Louisville price of $137,000 in May, up 1.1 percent from a year earlier. The median slipped to $136,000 in June.
“I think people are tired of waiting and the rates are still decent,” said Louisville Realtor Sandy Gulick. “I think people have gotten off the fence. I just think that the country is feeling a little bit more comfortable … ”
Reporter Gregory A. Hall can be reached at (502) 582-4087. The Associated Press contributed to this story.
The original article can be found at:http://www.courier-journal.com/apps/pbcs.dll/article?AID=2009907280340
Buoyed by the $8,000 federal tax credit for first-time homebuyers , Louisville-area home sales so far this month are up sharply over the same period a year ago.
The improvement — coming on the heels of June numbers showing an uptick over May — is an indication that as the nation's housing market shows signs of recovering, Louisville is gaining with it.
“The first-time homebuyers are making a huge, huge dent in the market,” said Jan Scholtz, president of the Greater Louisville Association of Realtors.
Sales through Monday were up 27 percent over the same period a year ago, said Lisa Stephenson, executive vice president of the Realtors association.
The 1,042 homes sold in July through Monday had already exceeded the 1,015 for the entire month last year, she noted.
Both nationally and locally, the tax credit is being cited as a significant factor in the market's improvement.
The credit is part of the federal stimulus package passed in February and applies to homes bought before Dec. 1.
Realtors say the hope is that as first-time homebuyers help the low end of the market, existing homeowners will be able to sell and move into larger quarters, stimulating sales among the higher-priced homes.
Joe Simms, owner of the Joe Simms Group RE/MAX Associates in eastern Jefferson County, said he tried Tuesday to set up appointments for a client and found four of the seven homes he planned to show had sold.
Because so many of the buyers have been purchasing starter homes, prices still are down, he said, but still, “we've been real busy. … We've had a great month, and I think most of it's due to the $8,000 tax credit.”
Earlier this month, the Louisville Realtors group, which draws chiefly from Jefferson, Bullitt and Oldham counties, reported its members sold 1,175 homes in June, the most since a year earlier and only 1.3 percent fewer than June 2008.
Southern Indiana Realtors reported selling 285 homes in June, a 13 percent increase from a year earlier.
Scholtz said she expects the local market to grow in coming months because consumers are more confident than they were when the housing and financial crises developed. “It's going to continue to gain like this,”Scholtz said. “We are going crazy selling houses to first-time homebuyers.”
Stephenson did not reveal median price figures for July, but agreed with Simms that prices are not up. With so much of the recent activity being among lower-priced homes, median prices haven't been as quick to rebound.
Nationally, sales of new homes rose by the largest amount in more than eight years last month, according to a Commerce Department report this week. Sales rose 11 percent in June to a seasonally adjusted annual rate of 384,000, from an upwardly revised May rate of 346,000, the government reported.
Low prices and historically low interest rates —– averaging 5.20 percent nationally for a 30-year fixed rate —– have also contributed to sales increases.
“The worst of the housing recession,” said David Resler, chief economist at Nomura Securities, “is now behind us.” And as with the overall economy, the “recovery” is likely to be slow and arduous, he said.
Last week, the National Association of Realtors said that sales of existing homes posted a monthly increase of 3.6 percent in June.
Also, home prices in May posted their first monthly increase nationwide since the summer of 2006, according to data released Tuesday in the Standard & Poor's/Case-Shiller home price index of 20 major cities. The index rose 0.5 percent from April, but was still 17.1 percent below May of last year.
Louisville is not part of the index, but Realtors' figures showed a median Louisville price of $137,000 in May, up 1.1 percent from a year earlier. The median slipped to $136,000 in June.
“I think people are tired of waiting and the rates are still decent,” said Louisville Realtor Sandy Gulick. “I think people have gotten off the fence. I just think that the country is feeling a little bit more comfortable … ”
Reporter Gregory A. Hall can be reached at (502) 582-4087. The Associated Press contributed to this story.
The original article can be found at:http://www.courier-journal.com/apps/pbcs.dll/article?AID=2009907280340
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