Barker and Hedges Real Estate Blog

A new home purchase tax credit is available now through a housing bill approved by Congress. If you have not owned a house during the past three years, or are considering buying your first home, and can go to closing within the qualifying dates, you may be eligible for up to a $7,500 credit against your federal taxes for 2008 or 2009 ($3,750 if you file taxes as a single person).

If you have closed on a home or will close on a house between April 9, 2008, and June 30, 2009, you may qualify for the tax credit. It can be any house new or old, in any location or condition, and within any price range as long as it is purchased during the designated time period

Basically, Congress is offering tax credits to pull in new purchasers in order to jump-start housing sales and clear out unsold real estate inventories.

Close on a house before next June 30, and you can claim a credit of up to 10 percent of the purchase price of the property up to a maximum of $7,500. If your adjusted gross income exceeds $150,000 ($75,000 for singles), the credit maximum begins to phase down in increments. You cannot claim the credit if you are a nonresident alien, financed the property using a state or local housing agency tax-exempt bond mortgage, or do not plan to use the house as your principal residence. Purchasers in the District of Columbia using the city’s first-time buyer credit program cannot double-up and use the new federal credit as well.

After you’ve purchased the home, the IRS will cut up to $7,500 off your tax bill for either this year or next. What’s more, the new home purchase tax credit is what the government calls “refundable.” If your tax bill is less than the credit amount, you get the difference back from the Treasury. For example, if you’re an eligible buyer of a home this year and you owe the IRS $4,000 on your total 2008 income tax bill, the $7,500 tax credit would not only wipe out everything you but you would also receive a $3,500 refund.

How do you know if you’re eligible? If you own a home now that was closed on before April 9 of this year, you don’t qualify. If you have never owned a home or sold a home more than three years ago and now rent, you are eligible.

There is a catch, though. Unlike some past tax credit programs, this one requires beneficiaries to repay the credit over an extended period of years. Starting in the second tax year after purchase and continuing for up to 15 years, taxpayers are expected to make pro rata repayments to the government on their federal filings. Over a 15-year payback period for the full $7,500 credit, the cost would be $500 a year. If you sell the house before the end of the repayment period, and you have no gain on the sale, you won’t be expected to pay the credit back from the proceeds. If you have a net gain, the “recapture” cannot exceed the amount of your gain. In other words, the federal government is taking on all or much of the risk that the value of your new house won’t increase over time.

At its core, the new tax credit functions very much like an interest-free loan for up to $7,500. You pay the principal back incrementally over time, but there’s no interest charged on it.

How do you claim the credit? If you pass the eligibility tests and buy before June 30, you simply request the credit on your tax return for either 2008 or 2009. Even if you purchase in 2009, you can take the credit against your 2008 taxes by filing an amended return. The homebuilders association is launching an educational website, www.federalhousingtaxcredit.com, with additional information for consumers.

Looking for something to do this weekend? Head to one or both of the Twin Cities zoos!

Three fisher kits born at the Minnesota Zoo are now on exhibit. The species resembles weasels and is found in Alaska, Canada and the northern lower 48 states. At one time, it was nearly extinct because of trapping and logging practices, but now they are doing well in mixed wooded and heavily forested areas.

The zoo in Apple Valley is one of just four nationally accredited zoos in the country to exhibit fisher kits and the only one to rear a brood in the past three years.

Born March 23, the two male and one female kits had been kept in an off-exhibit holding area with their mother as a health precaution. They are doing well and have started exploring their exhibit.

Fishers are known for their tree-climbing, hunting and agility. Solitary creatures, they are constantly on the move. They are dark brown in color, good swimmers and like to travel close to the water. Fishers primarily eat small mammals and are one of the few animals that eat porcupine.

A litter of kits, usually one to five in number, is usually born in March or April after a gestation period of 352 days.

But that’s not all! The Marjorie McNeely Conservatory and Como Zoo in Saint Paul also has a new arrival. A Chilean flamingo is the first flamingo in the zoo’s history to have a baby chick. Como has been exhibiting flamingos since the late 1960s. The tiny bird hatched from its egg last week in the Zoo’s Bird Yard.

Due to their uncommon breeding practices, many zoos have failed to produce flamingo chicks. But with better research, zoos have been becoming more successful in recent years. In fact, during recent weeks the Lincoln Park and Denver Zoos both reported their first flamingo eggs in history as well.

Como keepers attribute the success on a few other factors. The birds were outside slightly earlier this season and there was a wetter than normal spring. This hatchling is one of three eggs laid in late June. The other two appear not to be viable.

Flamingo are most known for their remarkable pale pink to salmon and red coloring, but they don’t look this way when they hatch. Flamingo chicks are born white and turn grey after a few weeks. It is after a year or so, and with a proper diet, that they begin to develop their pink coloring. Alpha and Beta carotene pigments in a flamingo’s diet create the brilliant hues. These pigments are added to the diets of captive flamingos.

One of the goals to preparing a house for sale is to highlight the features in your home, such as a fireplace, granite counter tops, bay windows, or a jet tub. Placing decor by these areas can help draw the eye so buyers will remember the features.

Home owners do not need to run to the nearest home decor store and spend hundreds of dollars to make their home look great; they can shop for decor in their very own house. I don’t mean online shopping, either. Using accessories from other rooms in a new and interesting way can give focal points the emphasis that it needs.

This photo to the left shows a jet tub with no accessories. Although nice, there is nothing memorable about this area. The lack of decor leaves this area feeling cold and uninviting.

Buyers who may view several house in one day may not remember anything special about this master bathroom.

This photo to the right displays a pedestal and vase with flowers taken from the living room. This decorative feature helps to emphasize the elegance of this space. The height of the arrangement brings drama into this master bathroom. Rolled towels on the opposite corner softens the room while bringing a spa-like feel.

The total cost of decorating this space was $0.00!

So whether you are selling your home or just want a new look for your space, using items from around your home can help you achieve an updated look without spending a lot of money!

KFM Staging & Design is a Minnesota home staging company that has been creating “First Impressions That Sell” for homeowners and Realtors across the Twin Cities and western Wisconsin. KFM specializes in home staging consultations and vacant stagings. For more information on home staging visit our website: www.kfmstaging.com.

Ahh, summer in “The Cities” is so much fun.  Every weekend, maybe even every day, there seems to be something fun happening.  This weekend is no different, and the festivities even got a jumpstart!  Lumberjack Days kicked off yesterday in Stillwater!

The festival has been Stillwater’s signature event since 1934.  It’s a showcase destination for fans of concerts on the St. Croix River, fireworks displays, and Stillwater’s logging heritage. As many as 60,000 people attend each year!  It started a day earlier than usual and continues through Sunday evening.

The festival takes place near the Stillwater Lift Bridge, which closed recently for repairs. However, the bridge has been reopened through the weekend to accommodate for Lumberjack Days.

The festival has undergone some experimentation since 2004.  Throngs of crowds came to see Lynyrd Skynyrd.  The city of 16,000 residents was inundated.  Reacting to concern that the festival had become too big for Stillwater, the City Council approved guidelines in 2005 to make the festival a tamer event. That doesn’t mean that there isn’t still plenty of fun to be had!

Today’s events include lumberjack competitions, bike and skateboard competitions, a treasure hunt, and “hometown night” with Uncle Chunk and Martin Zellar on the floating stage.

On Friday, Splatter Sisters in the park, concerts with Shook Twins, Soul Asylum and BoDeans on the floating stage, and of course, lumberjacks will be featured.

On Saturday, there will be pancakes in the parks, sidewalk sales, road races, an artists showcase, pie-baking contest, concerts with Corey Carlson, Al Jardine’s Endless Summer Band, Boz Scaggs, and what else but Lumberjacks?

Finally, on Sunday there will be a ecumenical church service, pancake breakfast, authentic 1860s baseball, grand parade, Swedish meatball night, jazz band, Abbamania on the floating stage, fireworks, and – you guessed it! – lumberjacks!

But there’s more! Much more!  I couldn’t possibly include it all here.  For a complete schedule, go to www.lumberjack days.com.

The Minnesota Home Ownership Center is holding workshops/open houses for people who are concerned about mortgage payments, are facing foreclosure or wish to learn about the foreclosure process. Foreclosure counselors and mortgage lenders will give free advice. No registration required.

Free workshops

• 6:30 to 7:30 p.m. July 29, North Regional Library, 1315 Lowry Av. N., Minneapolis.

• 6:30 to 8 p.m. July 30, Woodbury Central Park Library, 8595 Central Park Pl.

• 4:30 to 7:30 p.m. Aug. 5, Park Avenue United Methodist Church, 3400 Park Av. S., Minneapolis.

• 4:30 to 7:30 p.m. Aug. 19, St. Cloud Civic Center, 10 S. 4th Av., St. Cloud, Minn.

For information, call 651-659-9336 or visit www.hocmn.org.

On August 5th, residents all across Minnesota will gather together in their respective communities to participate in this year’s National Night Out.  At this national-but-local event, people all across the nation will be doing the same thing within their own communities.  National Night Out provides (NNO) an excellent opportunity for citizens to meet and greet with their neighbors, with the hopes of developing more close-knit communities.  It’s also a night when residents can cultivate relationships with the local law enforcement officials which keep their neighborhoods safe.  The Twin Cities will be no different, as National Night Out festivities will be occurring throughout the metro area.

This year marks the 25th anniversary of the first National Night Out.  The events are not only meant to introduce the law enforcement and safety officers to the individuals within community, but they’re also indented to elevate crime and drug prevention awareness within the public.  The hope is that these events will create and strengthen neighborhood unity, enhance collaboration between police and citizens, and generate involvement in local anticrime programs.  Furthermore, and probably most importantly, taking part in these events sends a serious message to criminals that our communities are organized and ready to fight for neighborhood safety. 

There is a huge following of National Night Out in Minnesota.  I wasn’t quite aware of just how involved the state was until I started doing a little digging around.  From front porch vigils to blocks parties, the state of Minnesota has one of the highest involvement rates in the nation.  Last year, Minnesota tied with Texas for having the most participants state-wide.  Also in 2007, Minneapolis was ranked at the top for resident participation among cities with a population of 300,000.  There were 1,117 officially recognized National Night Out parties in streets, parks, yards and homes in Minneapolis with more than 62,000 people taking part. In a few other categories, several Minnesota cities and counties have won various awards for their involvement in NNO events. 

If you want to learn more about NNO and National Association of Town Watch, the organization which first introduced it, you can check out the website here.  The history of NNO and NATW are not the main point of why I’m writing though. 

If you’re planning on closing off a street in celebration of National Night Out, you must have your application turned in by Thursday.  Originally the deadline was today, but it was pushed back two days.  Party organizers that register their event with the city will be eligible to win door prizes donated by Minneapolis businesses. Those who register their party with Minneapolis can also request vouchers for discounted Minnesota Twins tickets and free passes to Mystery Park at Nickelodeon Universe at the Mall of America, child safety cards, name tags and door hangers.

If you hadn’t thought of having a street party before and it sounds like something you’d like to do with your neighborhood, contact the City of Minneapolis.  If you want to attend an event, find out if there is one near you!  But that doesn’t mean you can’t hold small gatherings to promote neighborhood bonding and strengthen community spirit yourself.  A NNO party can be as simple as neighbors gathering for a picnic.  As long as neighbors are encouraged to meet, converse, and watch out for one another, the evening’s intention has been fulfilled.

No, this isn’t the latest California weight loss program… However, eliminating furniture pieces from your room may be beneficial to the sale of your home!

Rooms hosting extra large furniture items or too many furniture pieces will create two negative side-effects: 1) the room will appear cluttered and chaotic, and 2) the room will appear smaller than it should.

BEFORE STAGING

This large living room appears crowded due to the over-sized furniture and the numerous pieces. Buyers will appreciate the spaciousness of this room since the furniture is over-powering the space.

This layout also cuts off the natural traffic pattern from the living room to the family room. Although functional, buyers are left to navigate around the far side furniture making for an akward transition between rooms.

AFTER STAGING

Removing the love seat and adding a small-scale chair, space is visible around the furniture pieces which creates a more spacious feeling in the room.

Rugs are great to section off areas; however, in this case, removing the rug instantly increases the visual floor space resulting (again) in a spacious feeling.

With the new arrangement, easy pathways are created in and out of the room.

Even though buyers are not purchasing your furnishings, these items will set the atmosphere in your home that buyers will remember. Removing unneeded furniture will help to create an open layout that is stylish and inviting.

So, forget about counting calories and carbohydrates. Put on your spandex and headband, and get your exercise by following the Furniture Diet!

KFM Staging & Design is a Minnesota home staging company that has been creating “First Impressions That Sell” for homeowners and Realtors across the Twin Cities and western Wisconsin. KFM specializes in home staging consultations and vacant stagings. For more information on home staging visit our website: www.kfmstaging.com.

The “Ten Best Days of Summer” are in full swing! Celebrated in locations and venues across the city, the Minneapolis Aquatennial is the largest parade and free outdoor concert in Minnesota and has one of the largest fireworks displays in the U.S.! This celebration is attended by nearly 800,000 people over 10 days!

As I discussed before in this previous article about the Aquatennial, the celebration is always held the third full week of July. This year, the event started on Thursday, July 18, and it will run through July 27. This year’s Aquatennial will celebrate the year Minnesota achieves 150 years of statehood.

Some attractions and events at the Aquatennial include boat races, a sandcastle building competition, a beachside art fair, neighborhood park BBQs, athletics competitions, live music, entertainment, and more! Don’t forget the first Torchlight Parade and the annual “Milk Carton Boat Races”!

You can check out the full schedule of activities at the official Minneapolis Aquatennial website!

New listings for homes fell in Saint Paul, Minnesota, during the month of June, according to the Minneapolis Area Association of Realtors’ Market Update for 100 Twin Cities Communities. During June of 2008, there were 632 new listings in the City of Saint Paul. In June of 2007, there were 694 new listings, which is a drop of about 8.9%, much better than May 2008’s drop of 23.8%. St. Paul’s Downtown again has experienced the greatest decline in new listings at -51.2%. The Phalen neighborhood experienced the greatest increase in new listings over last year at 111, 18.1% more than June 2007. Here is a list of June 2008 new listings in Saint Paul by neighborhood and the percentage of change that has occurred compared to June 2007. (To see a Barker & Hedges blog entry about May 2008 St. Paul Market Activity, please click here.)

Como 35 (-32.7%)
Crocus Hill 41 (-24.1%)
Downtown Saint Paul 21 (-51.2%)
East Side 130 (-1.5%)
Highland Park 31 (-36.7%)
Mac-Groveland 46 (+7.0%)
Merriam Park 20 (-16.7%)
North End/Frogtown 81 (+14.1%)
Phalen 111 (+18.1%)
Southeast 19 (-5.0%)
St. Anthony/Midway 31 (-40.4%)
West 7th 24 (+4.3%)
West Side/Cherokee 38 (+11.8%)

When you look at Saint Paul’s posted new listing for the 2008 year-to-date, from January through June, there were 3,770 new listings in the city, compared to 4,149 during the same time period of 2007. That means there were 9.1% fewer new listings so far this year. The most dramatic changes have happened in the Merriam Park neighborhood, where new listings have decreased by 28.0% while the Phalen neighborhood’s new listings continue to increase with 11.9% more houses for sale than last year. Here is a list of new listings in Saint Paul for the 2008 year to date compared to 2007:

Como 230 (-17.0%)
Crocus Hill 294 (-16.5%)
Downtown Saint Paul 241 (-20.2%)
East Side 808 (+0.6%)
Highland Park 247 (-10.5%)
Mac-Groveland 225 (-13.8%)
Merriam Park 108 (-28.0%)
North End/Frogtown 450 (-5.9%)
Phalen 525 (+13.1%)
Southeast 129 (-20.9%)
St. Anthony/Midway 195 (-32.8%)
West 7th 110 (-22.5%)
West Side/Cherokee 195 (+8.9%)

In this case, reduced listings has certainly not meant fewer closed sales on homes in St. Paul, Minnesota. At 297, there were over 6.5% more closed sales than June of 2007’s 279. This has helped the 2008 year overall closed sales, which has crept up from 6.4% below last years figure to just 3.6% under. 1,237 home sales were closed in St. Paul from January through June of 2008 compared to 1,283 during the same time period last year. A little more and we’ll be even with last year!

As for home sales prices in Saint Paul, the downward trend is has unfortunately continued. The average sales price of a home in the City of St. Paul was $185,868 in June 2008 compared to $265,234 in 2007. That is a decrease of a whopping 29.9%! The only exception for this was the West Side/Cherokee neighborhood, which saw its sales price for a home increase 4.0% to $178,317 over last year. The average sales price year-to-date in the City of St. Paul is no better at $184,538. During the same time period in 2007, the average sales price of a home was $231,782, a decrease of 20.4%. The percentage of St. Paul homes which sold at their original list price has increased to 90.1%, an increase of over one full percentage point from last month. But in 2007, 95.5% of the homes sold in June were purchased for their original listing price.

Average prices of homes sold in Saint Paul by neighborhood during June 2008:

Crocus Hill $369,236 (-24.2%)
Downtown Saint Paul $180,866 (-2.2%)
East Side $109,586 (-30.9%)
Highland Park $281,743 (-13.5%)
Mac-Groveland $296,207 (-23.8%)
Merriam Park $269,042 (-15.8%)
North End/Frogtown $89,326 (-41.4%)
Phalen $124,614 (-24.4%)
Southeast $146,775 (-28.2%)
St. Anthony/Midway $176,182 (-16.3%)
West 7th $141,436 (-16.3%)
West Side/Cherokee $178,317 (+4.0%)

Homes for sale in Saint Paul are staying on the market longer than they did in 2007. In June of 2008, a home in St. Paul was on the market for an average of 134 days before it was sold. In June of 2007, homes for sale in Saint Paul were on the market for an average of 112 days before selling. The amount of time a home spends on the market varies from neighborhood to neighborhood as well. Homes in the Como Saint Paul area on the market in June were selling after just 60 days on the market, compared to 2007’s 89. It’s taking about 5 months in most neighborhoods. In Southeast St. Paul, it’s taking 244 days for a home to sell! That’s over 8 months! Year to date, homes are taking an average of 144 days to sell, compared to 2007’s 125 days. Here is the average number of days a home is on the market at the time of sale by St. Paul neighborhood for June of 2008.

Como 60 (-33.1%)
Crocus Hill 141 (-11.3%)
Downtown Saint Paul 133 (+9.8%)
East Side 139 (-0.3%)
Highland Park 106 (+14.9%)
Mac-Groveland 110 (+74.7%)
Merriam Park 125 (+13.2%)
North End/Frogtown 147 (+20.7%)
Phalen 169 (+61.6%)
Southeast 244 (+111.1%)
St. Anthony/Midway 177 (+79.1%)
West 7th 117 (-17.1%)
West Side/Cherokee 106 (-43.8%)

This is a brief analysis of the St. Paul real estate market based on calculations by the Minneapolis Area Association of Realtors. These statistics do not reflect all situations. Though much of this information may seem like a downer, much of it a necessary market correction which has been happening for a while. It will take time for the real estate market to stabilize.

Browse homes for sale by Saint Paul Neighborhood:

Battle Creek & Highwood
Como/Como Park
Downtown
Greater East Side
Hamline-Midway
Highland Park
Dayton’s Bluff
Payne-Phalen
Macalester-Groveland
Merriam Park
North End
St. Anthony/Midway
Summit Hill
Summit University
Thomas-Dale
West Side
West 7th

During the month of June 2008 in Minneapolis, there was once again a decrease in new listings, according to the Minneapolis Area Association of Realtors’ Market Update for 100 Twin Cities Communities. During June of this year, there were 1,049 new listings. In June 2007, there were 1,184 new listings. That is a drop of 11.1%. It’s much better than May’s nearly 20% decrease in new real estate listings. The University community experienced the greatest decrease in new listings during June. There were just 12 new listings in University, down a whopping 58.6% from June of 2007’s 29. Conversely the Phillips community, which experienced a great decrease in new listings during May, has seen its new real estate listings jump 173.7% during June 2008 compared to last year. There were 52 new listings here compared to last year’s 19 during the month. Here is an inventory of June 2008 new listings in Minneapolis by community and the percentage of change that has occurred compared to June 2007. These changes are very different compared to the real estate activity of May. (To see a Barker & Hedges article about May 2008 Minneapolis Market Activity, please click here.)

Camden 144 (-2.7%)
Downtown Minneapolis 123 (-40.6%)
Longfellow 61 (+5.2%)
Nokomis 119 (-21.2%)
North 128 (+21.9%)
Northeast 91 (+5.8%)
Phillips 52 (+173.7%)
Powderhorn 80 (+14.3%)
Southwest 118 (-33.0%)
University Area 12 (-58.6%)
Uptown-Lakes 121 (-8.3%)

Though some of those changes seem quite drastic, looking at Minneapolis’ posted new listing for the 2008 year-to-date softens that outlook a bit. From January through June of 2008, there were 6,194 new listings, compared to 7,100 during the same time period of 2007. That is a decrease of 12.8%. The most dramatic adjustments happened in the Uptown-Lakes and Downtown areas, which have experienced a drop in new listings of -26.5% and -24.1% respectively over the course of the year compared to last year. On the other end of the spectrum, the Phillips and North communities had increases in new listings of 24.5% and 11.9% respectively. Here is a depiction of new listings in Minneapolis by community for the 2008 year to date and the percentage of change that has occurred compared to 2007:

Camden 838 (-6.3%)
Downtown Minneapolis 789 (-24.1%)
Longfellow 333 (-9.3%)
Nokomis 716 (-20.4%)
North 772 (+11.9%)
Northeast 463 (-18.1%)
Phillips 193 (+24.5%)
Powderhorn 478 (+10.9%)
Southwest 768 (-16.9%)
University Area 142 (-22.0%)
Uptown-Lakes 700 (-26.5%)

Time for some good news! Minneapolis closed sales have picked up! Throughout the month, there were 516 properties sold, which means there were 5.5% more closed sales than in June of 2007. For the 2008 year to date, the City of Minneapolis closed sales are much closer to last years than they were just a month ago, at just about -3.3% lower than last year. 2,173 home sales were closed in Minneapolis so far in 2008 compared to 2,248 during the same time period of 2007.

Back to some less good news. When it comes to home sales prices, the downward spiral has unfortunately continued. The average sales price of a home in Minneapolis was $222,804 in June 2008 compared to $280,358 in June 2007, a decrease of 20.5%! The average sales price year-to-date in the City of Minneapolis isn’t much better off, as from January through June of 2008 the average sales price of a home was $214,406, a decrease of 16.8% from last year’s $260,037 for the same time period. The percentage of Minneapolis homes which sold at their original list price was 92.4% during the month of June, down from 95.2% in 2007. There is a community which is bucking the trend, however. Downtown Minneapolis has experienced an increase in real estate values due to high demand for properties here. The average price of a home sold in Downtown Minneapolis during June was $364,908, up 10.6% from last June’s $329,895. The year-to-date sale price of real estate Downtown has risen 2.1% to $325,687. 96.1% of homes sold in Downtown Minneapolis are closing at their original listing price.

Average prices of homes sold in Minneapolis by community:

Camden $83,635 (-34.9%)
Downtown Minneapolis $364,908 (+10.6%)
Longfellow $194,776 (-13.3%)
Nokomis $224,151 (-4.4%)
North $69,889 (-40.8%)
Northeast $170,024 (-17.4%)
Phillips $128,607 (-30.4%)
Powderhorn $144,252 (-15.9%)
Southwest $338,720 (-19.8%)
University Area $231,848 (-6.4%)
Uptown-Lakes $315,668 (-30.8%)

Finally, homes for sale in Minneapolis are staying on the market for much longer than they were in 2007. Last year in June, a Minneapolis home was on the market for an average of 116 days before selling. During June of 2008, a home was on the market for an average of 143 days when it sold. The statistics vary based on neighborhood and the types of housing on the market. Condos and town homes are being snapped up much more quickly than usual, while single family homes are staying on the market for much longer than usual. Here is the average number of days a home is on the market at the time of sale by individual Minneapolis community during the month of June 2008.

Camden 186 (+2.6%)
Downtown Minneapolis 241 (+ 49.2%)
Longfellow 80 (+103.9%)
Nokomis 117 (+61.3%)
North 173 (+17.5%)
Northeast 139 (+11.2%)
Phillips 159 (-18.2%)
Powderhorn 105 (-13.6%)
Southwest 106 (+4.0%)
University Area 52 (-32.1%)
Uptown-Lakes 128 (-17.4%)

This is a brief analysis of the Minneapolis real estate market based on calculations by the Minneapolis Area Association of Realtors. These statistics do not reflect each individual situation of course.

Browse homes for sale by Minneapolis community:

Calhoun Isle
Camden
Central
Longfellow
Phillips
Powderhorn
Near North
Nokomis
Northeast
Southwest
University