It used to be that buyers of real estate made offers to sellers of real estate. But in today’s much more competitive market for sellers, it seems that they’re the ones making the offers now.

Virginia REALTOR® and blogger Scott Rogers has worked with several sellers recently who have made offers to buyers who had expressed serious interest in the seller’s home. In a recent post he shares some tips to sellers considering such a move.

I suppose that shouldn’t seem so strange given the freebies some sellers have offered potential buyers, from a free car to themselves (the old buy-a-house-get-a-wife deal).

Any REALTORS® in Memphis worked with a seller who wanted to approach a seriously interested buyer with an offer? Any local sellers thinking about making the first move?

This morning, President Bush signed into law the Housing and Economic Recovery Act of 2008, legislation aimed at shoring up the housing market in the United States and offering current homeowners with troubled mortgages and potential homeowners with significant assistance.

Of most interest to people who do not own a home but have been thinking about it is a $7,500 tax credit to qualified first-time home buyers who purchase a home between April 9, 2008, and June 30, 2009. That’s a tax credit, meaning those who qualify will receive a dollar-for-dollar reduction in what they owe the year the credit is taken against their income taxes. The credit does have to be repaid, but it is done over 15 years and payments don’t start until tax returns files two years after the credit is taken.

In the Memphis-area market first-time buyers make up a larger share of all buyers than the national average, which means a larger number of people locally stand to benefit from the credit. Add to that the affordability of Memphis-area real estate and it adds up to an outstanding opportunity for first-time buyers.

Here’s the fine print:

• The credit amount can be 10 percent of the cost of the home purchased, not to exceed $7,500.
• Any single-family property (including condos) that will be used as a primary residence is eligible.
• The full amount of the credit is available for individuals with adjusted gross income of no more than $75,000 ($150,000 for joint filers). The amount of credit available gradually phases out as adjusted gross income reaches $95,000 for a single filer and $170,000 for joint filers.
• The credit is repayable over 15 years (without interest) in equal installments of 6.67% of the credit or when the owners sell the home, assuming there is sufficient capital gain from the sale. Repayment does not begin until two years after the credit is claimed.

More detailed information on the tax credit, including FAQs and answers, is available at this site created by the National Association of Home Builders.

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A little over a week ago, Dennis Kneale commented on CNBC about whether the housing “crisis” is really a crisis at all, or just a smaller problem blown out of proportion. From Kneale’s perspective it all comes down to the numbers, which reveal homeowners most affected by the supposed “crisis” is a much smaller percentage than what you might believe.

Direct link to the video is:

http://www.cnbc.com/id/15840232?video=780461999

The Virginia Association of REALTORS® has posted on its VAR Buzz blog an excellent article on short sales that offers someone new to this type of transaction a good overview of the topic. While no article can replace experience, especially when it comes to short sales (where each transaction is likely to be nothing like the next one), this article provides a great foundation or review for any practitioner.

And if you’re looking for more instruction on short sales, register for the August 8 class at MAAR.

Do higher gas prices have anything to do with a decline in real estate sales prices? According to this report from CEOs for Cities, they do have an impact, especially on homes in outlying suburbs and in metro areas with weak central cities.

In the report, Driven to the Brink: How the Gas Price Spike Popped the Housing Bubble and Devalued the Suburbs, Joseph Cortright lays out how the run up in gas prices in the past few years corresponded with the popping of the housing bubble.

Between 1990 and 2004 the price of gas was essentially unchanged in inflation-adjusted terms, making a longer commute from your new home in the suburbs a non-issue, at least from a financial standpoint. Today’s gas prices averaging more than $3.50 a gallon is pinching all consumers, but likely weighs more heavily on those metropolitan areas and suburbs where people have to drive the farthest.

As such, the report found that while there is overall weakness in housing prices, price declines are generally more severe in cities and neighborhoods that require lengthy commutes and provide few transportation alternatives to driving your own vehicle.

Looking at housing values in five cities in both close-in and distant neighborhoods, the researchers found that in each case, housing prices fared worse in the more distant neighborhood. In Portland, the price of an average house in the 97202 ZIP code (3 miles from the central business district downtown) increased 7.7% from the fourth quarter 2006 to the fourth quarter 2007. During the same period, the average house in suburban Vancouver, Ore. (13.6 miles from the central business district) saw a price decline of 8.4%.

In concluding his report, Cortright offers five policy implications for leaders in all communities:

• The relative decline in prices in sprawling suburbs is likely to persist because of the continued high price of gas, and governments should plan accordingly.
• The market for higher density and redevelopment in close-in neighborhoods is likely to grow stronger, and local land use plans should accommodate this shift.
• Government can help families save money by making it easy and convenient to live in mixed-use, close-in neighborhoods served by transit.
• Reducing vehicle miles traveled not only saves families money, households that drive less have more to spend on other things, stimulating the local economy. Additionally, reducing oil consumption not only cuts greenhouse gas emissions but lowers the trade deficit.
• Many distant exurban developments may no longer be economical, and propping up building and homeownership in these areas encourages unsustainable settlement that makes families even more vulnerable to future gas price increases.

Considering that gas prices aren’t likely to fall soon, if ever, this report’s findings have some striking implications, not only for Memphis-area real estate, but the future economic success of our city.

On April 24th, U.S. Congresswoman Marsha Blackburn asked to meet with several members of MAAR to discuss the current housing market in Tennessee and how she could help in Congress.  MAAR President John Snyder, Governmental Affairs Director Aubrie Kobernus, several members of MAAR’s Governmental Affairs committee, and I were able to spend an hour talking frankly with the Congresswoman. We told her what we felt were the most important issues that needed to be addressed to help get our market improving at a faster rate.

We shared with her the importance of pending legislation to allow for lower down payments for FHA loans and risk-based pricing. Another discussion involved the type of information related to real estate markets that’s given to the media out of Washington. The concern we expressed is that they’re using information that basically covers ONLY those markets that are experiencing drastic price reductions. We asked that the representatives of the states that are not seeing the same type of problems be very loud and clear that this information doesn’t cover every market. As we all know quite well, real estate is a local issue that differs no matter where you are.

Other topics of discussion included:

• Tax credits for the purchase of a home
• The merits of a government bailout of the lenders that have bought these bad loans
• Possible legal action against lenders who fraudulently made these loans

It was a great discussion in an hour’s time and we’re hopeful Ms. Blackburn will take some of our ideas back to Washington. We’ll have a chance to reiterate these points in our visits with other Tennessee representatives during the NAR Midyear Legislative Meetings in Washington May 12-17.

Pending sales recorded by the MAAR Multiple Listing Service as of March 15 were up more than 4 percent from pending sales recorded as of February 15. This is the second straight month we’ve seen an increase in pending sales and that statistical data is in line with anecdotal reports from many MAAR members who have reported increased activity for the first few months of 2008. This information is part of the February market report released today by MAAR.

With the February report we have begun including sales, pricing, and days on market information broken out for 17 geographic areas: Fayette and Tipton counties and 15 areas within Shelby County. This expanded reporting should provide MAAR members and the general public with a more detailed view of what’s happening within the Memphis-area real estate market.

Look for more enhancements to the MLS statistics report in the coming months as we add more historical data to show longer-term trends.

In a recent special report, bizjournals.com, the publisher of the Memphis Business Journal and 40 other business journals across the country, ranked Memphis as the ninth most affordable housing market of the 50 largest U.S. metropolitan areas. Probably not surprising to many, but the good thing about the methodology of this report is that the rankings are based not only on housing costs, but on the total housing payment cost as a percentage of household income. The top 10 are (total housing payment as a percentage of household income in parentheses):

1. Oklahoma City (19.04%)
2. San Antonio (19.91%)
3. Birmingham (20.29%)
4. Indianapolis (20.72%)
5. Pittsburgh (21.22%)
6. Kansas City (22.26%)
7. Buffalo (22.28%)
8. Houston (22.33%)
9. Memphis (22.43%)
10. Rochester, N.Y. (22.44%)