DO YOU QUALIFY?

• Your HVAC system is at least 10 years old.
• You install a qualifying replacement in 2009 or 2010.
• You haven’t maxed out the energy tax credit on other upgrades.

The federal energy tax credit is based on 30% of the cost of an eligible HVAC system, including installation charges.

Replacing an aging heating and cooling system can save you money over time. According to Energy Star, a federal program that promotes energy efficiency, about half of what the average household spends on energy bills goes toward heating and cooling.

Upgrading your heating, ventilation, and air conditioning (HVAC) to energy-efficient units can cut utility costs by about 20%, or $200 annually, on average. A tax credit for heating and cooling systems can make the project more affordable.

This type of home improvement doesn’t come cheap. Prices vary widely based on where you live, unit specifications, and the condition of your home, but figure a high-efficiency furnace will start at around $3,500, including installation, estimates Corbett Lunsford, executive director of Chicago-based Green Dream Group. A standard furnace may cost $2,400. To help offset the price difference, the IRS allows a tax credit worth up to $1,500 on eligible HVAC systems put into service during 2009 or 2010. Consult a tax adviser.

Pay attention to efficiency ratings
To earn an Energy Star rating, furnaces must be more efficient than standard units, with annual fuel utilization efficiency ratings, or AFUE, of 85% for oil furnaces and 90% for gas furnaces. The Energy Star seal of approval alone isn’t enough to garner the federal tax credit. Credit-eligible gas furnaces (either natural gas or propane) must have AFUE ratings of 95% or greater; oil furnaces, 90%. A boiler must have an AFUE of 90%.

Heating by burning a fuel is inherently inefficient. Simply put, high-efficiency furnaces have components that are better designed to get more heat out of the combustion process, Lunsford says. You’ll need to hire an HVAC contractor to calculate the size of the equipment needed for your home. Beware bidders who take a one-size-furnace-fits-all approach. Air source heat pumps and advanced main circulating fans can also qualify for the $1,500 tax credit.

Technically, a homeowner could replace either a furnace or a central air-conditioning unit and be eligible for the tax credit. Practically speaking, you probably will have to replace both for the A/C to qualify, says Enesta Jones, a spokeswoman for the U.S. Environmental Protection Agency. Most homes have split systems made up of an outdoor condenser and compressor that are connected to an indoor air handler that’s part of the furnace. Split systems must have a SEER rating of at least 16 and an EER rating of at least 13. The higher the rating, the more energy efficient the unit. A package A/C system, which houses all of its components outdoors, requires lower ratings.

HVAC’s value goes beyond savings
It typically takes about a decade’s worth of energy savings to recoup the investment in a new HVAC system, Lunsford says, though that time frame can vary greatly depending on how much fuel prices fluctuate. Less apparent in dollar terms are increasing the comfort level in your home and lowering your household’s drain on non-renewable fossil fuels. Then there’s the effect on your home’s value when it comes time to sell.

You’re going to enhance a home’s salability by moving to a more energy-efficient heating and cooling system, says Frank Lesh, president of Home Sweet Home Inspection Co. in Indian Head Park, Ill. That doesn’t mean adding a $5,000 furnace will add $5,000 to the sale price. Rather, potential buyers are less likely to push for repairs or negotiate a credit if the HVAC is in good shape. Evaluate systems older than 10 years for possible replacement.

But before you do, conduct a wider energy audit of your home. Lunsford, also manager of consumer education for the U.S. Green Building Council’s Chicago Chapter, says he rarely recommends replacing a furnace as the first step in making a home more energy efficient. Instead, start by sealing it against air leaks. Do-it-yourself caulking and weather-stripping help, as does adding insulation in the attic. Professional air sealing, which is more effective, can cost as much as $5,000 for a large house, he says. The payoff: Energy costs should go down, and you might be able to get by with a smaller HVAC system.

Getting tax credit for your upgrades
The federal energy tax credit is based on 30% of the cost of an eligible HVAC system. Installation charges count too. A $5,000 bill would max out the credit. You’ll need to owe more in taxes than you’re trying to claim in credits to qualify. Use IRS Form 5695. Save receipts for your records, as well as manufacturers’ certification statements. If part of a new HVAC system qualifies for the credit but another part doesn’t, ask the contractor to itemize the receipt.

The tax credit is aggregated for all qualifying energy upgrades—insulation, roofs, windows, and so on—so you can’t claim separate $1,500 credits for each project. Only improvements to your existing primary residence count. New homes and second homes are excluded.

This article provides general information about tax laws and consequences, but is not intended to be relied upon by readers as tax or legal advice applicable to particular transactions or circumstances. Readers should consult a tax professional for such advice, and are reminded that tax laws may vary by jurisdiction.

Barbara Corcoran, a consultant for NBC’s  Today show, named Topeka as the number three city in the country to buy a home, right behind South Bend, Ind. and Akron, Ohio.  Locations were picked based on local real estate markets, size and value of houses, job growth and quality of education.

“Home prices haven’t gone down by more than 1 percent,” Corcoran said of Topeka. “Unemployment is only 6 percent. And it’s a great family area.”

Top 10 top cities to get the most bang for your buck:

1. South Bend, Ind.
2. Akron, Ohio.
3. Topeka, Kan.
4. New Haven Conn.
5. Tuscon, Ariz.
6. Minneapolis.
7. Portland, Maine.
8. Miami.
9. Kingston, NY.
10. Trenton, NJ.

See the video here:

Visit msnbc.com for breaking news, world news, and news about the economy

83 Percent of Current Homeowners Surveyed Say They Would Spend Tax Credit on Repaying Existing Debts, Home Improvements, Savings/Investments and Household Expenses

Coldwell Banker Real Estate LLC today announced the findings from a new survey that looked at how the recently expanded federal homebuyer tax credit, which opened up the credit to existing homeowners, might impact the economy.  Of the more than 1,000 homeowners surveyed, 83 percent responded that if they were to purchase a home and qualify for the tax credit, they would engage in “smart spending” or put the money toward paying off existing debts, home improvements, savings/investments, or everyday household expenses.  Only 6 percent of respondents indicated that they would spend the money on what are commonly referred to as luxury items such as a vacation or a shopping spree.

According to the survey, the top way homeowners would spend their $6,500 tax credit in a “smart” way would be to pay off debts (34 percent), followed closely by making home improvements (29 percent) and putting it into savings and investments (28 percent).

In addition, Coldwell Banker Real Estate found that 20 percent of homeowners indicated they were more likely to consider purchasing a home than they were six months ago, after learning about the $6,500 federal tax credit. The tax credit, which previously only was for first-time homebuyers, is now available to existing homeowners who sign a binding contract before April 30, 2010 and close on the purchase of a home before June 30, 2010. To learn more about the details of the expanded homebuyer tax credit, go to www.cbkansas.com.

“I congratulate Congress and the Administration on the passage of the ‘The Worker, Homeownership, and Business Assistance Act of 2009’,” said Bryon Schlosser, President of Coldwell Banker Griffith & Blair American Home    “The National Association of Realtors recently reported that 47 percent of 2009 home sales were to first-time homebuyers, so clearly the initial tax credit worked.  “Our local market data coupled with the findings from our survey offer(s) positive indicators that there are more existing homeowners considering a home purchase today than there were six months ago, and the majority of respondents say they would engage in ‘smart spending’ that would directly benefit the U.S. economy.”

The holiday season from November through January is often considered the worst time to put a home on the market. While the thought of selling your home during the winter months may dampen your holiday spirit, the season does have its advantages: holiday buyers tend to be more serious, and competition is less fierce with fewer homes being actively marketed. First, decide if you really need to sell. Once you’ve committed to the challenge, don your gay apparel and follow these tips from FrontDoor.com.

1. Deck the halls, but don’t go overboard. Homes often look their best during the holidays, but sellers should be careful not to overdo it on the decor. Adornments that are too large or too many can crowd your home and distract buyers. Also, avoid offending buyers by opting for general fall and winter decorations rather than items with religious themes.

2. Hire a reliable real estate agent. That means someone who will work hard for you and won’t disappear during Thanksgiving, Christmas or New Year’s. Ask your friends……

READ MORE HERE!

Buying a first home is one of the most important decisions a person can make, but it can be a complex process. Coldwell Banker Griffith & Blair American Home in Topeka, Kansas offers tips for first-time homebuyers with a checklist of the 10 essential steps to help make the process smooth and successful.

Step #1—Ask Your Lender About Available Mortgage Programs: An experienced mortgage company should be able to work with you one-on-one to determine exactly which mortgage programs will meet your individual needs and what you can qualify for based on your personal information. Applicants with higher credit ratings and/or higher levels of financial reserves generally receive more competitive mortgage rates. But with hundreds of available mortgage programs, there is usually one to meet the needs of almost any homebuyer. For those with excellent credit, there is even a way to get a mortgage with 0% down.

Step #2—Research the Terms of the Mortgage: Different mortgage lenders have varying price structures that can affect the amount that you pay for your home. An annual percentage rate (APR) includes the actual interest rate on the loan, as well as certain fees and costs associated with the loan. Because a customer may be paying points and other closing costs, the APR disclosed may appear to be higher than the actual interest rate quoted for the loan. Not all lenders calculate APR identically; however, it does give customers a relatively fair method of comparing price on their potential loans.

Step #3—Get a Pre-Qualified Loan Commitment: Even before the house hunting begins, homebuyers need to determine how much they can afford. Mortgage companies or other lending institutions provide pre-qualified loan commitments. Sellers often don’t take an offer seriously unless the prospective first-time buyer has some assurance of creditworthiness from a mortgage company.  A pre-approval with a reputable lending institution means more because a full credit report is ordered on the customer so that a true loan decision can be made the same day a customer applies. Shopping for a home with a pre-approved mortgage enables a customer to negotiate as a cash buyer and submit an offer on a home with confidence that the mortgage will be issued and the sale will be completed.

Step #4—Do Your “Homework”: Be sure to acquire home buying information from sites such as coldwellbanker.com to check for listings, neighborhood information, current mortgage information and home ownership services. The right amount of research will help you to better understand the marketplace and homes available in your price range when you’re ready to work with a real estate professional.

Step #5—Make a Checklist: To help make the home buying process a little easier, homebuyers should create a checklist of the important features they want in a home. Location and the number of bedrooms and bathrooms are usually important. Other important questions to answer: What will the commute to work be like? Are there shopping centers, parks, and schools located near the home?

Step #6—Find a Buyer’s Agent: A buyer’s agent represents the buyer’s interests and helps identify homes that are for sale and in the right price range. The agent also can help with such tasks as writing contracts, negotiating the asking price, and closing the purchase.

Step #7—Make an Offer: Once you find the right house, make an offer. Make sure that your offer is contingent on two items: 1) You’re able to obtain adequate financing (if you haven’t done so already), and 2) you can pull out if the property doesn’t pass the home inspection, and the owner can’t come to terms about how to fix the problem. Be prepared for counter-offers from other buyers and some negotiation with the seller. Make an earnest money deposit, which is a check that you’ll give your agent to indicate that you’re serious about buying the house. The check will apply toward the sales price if the deal goes through; if not, you get it back. You should also set a time limit with your agent that the offer you’ve made is good for three days. If an offer is accepted, it goes to the contract phase.

Step #8—Hire A Home Inspector: Making an offer contingent on an inspection by a registered home inspector can save thousands of dollars by avoiding unseen problems. Inspectors will check the house for any structural damage. In the contract with the seller, it should state any necessary repairs that must be made before closing on the house. Prior to closing, walk through the house and check that such repairs have been completed.

Step #9—Buy Homeowners Insurance: Lenders require homeowners insurance to protect the new homebuyer’s interests as well as their own. There are many providers so shop around for the best rates.

Step #10—The Closing: This is where the seller and buyer sign settlement-closing papers to transfer the ownership of the home and all transactions are finalized. Congratulations, you achieved the American dream and you are now a homeowner!

New Legislation Extends the Federal Tax Credit for First-Time Home Buyers and Expands the Incentive to Current Homeowners

(TOPEKA, KS) – For many Americans, home ownership is a key step towards achieving the American Dream.  Bryon Schlosser, CEO of Coldwell Banker Griffith & Blair American Home, said, “It’s a great time to be buying or selling a home in Topeka.  Prices and inventories are stable, mortgage rates are at historic lows, and for the next few months we have new government incentives.”

On November 6, 2009, President Obama signed “The Worker, Homeownership, and Business Assistance Act of 2009,” bringing that dream one step closer to reality.

To help consumers who are considering purchasing a primary residence, Coldwell Banker Griffith & Blair American Home has summarized the details of this new legislation and what it means for those thinking about entering the market:

• Eligibility: The tax credit is now available for first-time home buyers and repeat homeowners. A first-time home buyer is defined as an individual who has not owned a principal residence during the three year period prior to the purchase.  For married taxpayers, the law tests the homeownership history of both the home buyer and his/her spouse. For example, if you have not owned a home in the past three years but your spouse has owned a principal residence, neither you nor your spouse qualifies for the first-time home buyer tax credit.

A repeat homeowner is defined as someone who has owned and resided in a home for at least five consecutive years within the last eight.

• The federal tax credit amounts to 10 percent of the cost of the home, up to a maximum credit of $8,000 for first-time homebuyers and $6,500 for current homeowners.
  
  • e.g., If a home costs $60,000, the allowable credit for both a first-time homebuyer and a current homeowner would be $6,000. If a home costs between $80,000 and $800,000, then the allowable credit for a first-time homebuyer would be $8,000 and for a current homeowner, $6,500.

• Individuals whose Form 1040 filing status is “single” are eligible for the tax credit if their income is no more than $125,000. Individuals who file a joint return are eligible if they have no more than $225,000 in income.

Single taxpayers who earn between $125,000 and $145,000, and married couples who earn between $225,000 and $245,000 are eligible to receive a partial credit.

• The federal income credit can be claimed on one’s individual or joint tax return for the purchase of any single-family home (newly-constructed or resale, single-family detached, townhomes or condominiums) between the dates of November 7, 2009 and April 30, 2010. Home purchases subject to a binding sales contract signed on or before April 30, 2010 will also qualify for the tax credit provided closing occurs on or before to June 30, 2010.
• The tax credit is refundable. A refundable credit means that if the amount of income taxes a home buyer owes is less than the credit amount he / she qualifies for, the government will send a check for the difference.  In essence, the credit is a dollar-for-dollar reduction in what taxpayers owe for the calendar year they purchase their home but the taxpayer may also amend the prior year’s return to claim the credit more quickly.
  • e.g., A first-time home buyer who qualifies for the full $8,000 tax credit and owes $5,000 in federal income taxes would owe nothing to the IRS and receive a $3,000 payment from the government.  A repeat buyer who qualifies for the full $6,500 tax credit and owes $5,000 would pay nothing to the IRS and receive $1,500 back from the government. If the repeat buyer is due to get a $1,000 refund, he / she would get $7,500 ($1,000 plus the $6,500 move-up buyer tax credit).

The tax credit is a true credit. It does not have to be repaid unless the homeowner sells or stops using the home as their principal residence within three years after the purchase.   In that case, the full credit amount will be recouped on the sale.  There are exceptions in the event of the homeowner’s death or if a sale results in a loss.

For further understanding of how the extended tax credit differs from the previous version and how it can benefit first-time and repeat homebuyers additional information can be found on CBKansas.com.

This is based on information available as of November 2009 and is not meant to be tax or legal advice.  As with any tax law change, consumers should check with a tax advisor regarding availability, eligibility and possible timing of any tax credit.

Now that we have seen our first glimpse of snow and we’re pulling out the coats from the back of the closet, it’s time to turn our thoughts to hibernating season… better known as winter.

With this inevitable change of the seasons the biggest question REALTORS get from sellers is;

“Should we take our home off the market for the holidays?”

I understand that no one wants to be disturbed during their Thanksgiving dinner or their Holiday celebrations. No one wants to get a call that a buyer wants to see their home while they’re decorating the Christmas tree or wrapping presents. BUT, there are a lot of positive reasons to keep your house on the market without interruption for the next few months. Especially this year with the way the Topeka Real Estate Market is going.

Everyone wants to enjoy the holidays. That’s why potential buyers who are out looking for homes during November, December and January are SERIOUS buyers.   These buyers aren’t just out looking at house to get decorating ideas or to pass the time, they have a need for a new home and will interrupt their busy holiday schedules to look at the homes that appeal most to them. So, why would you pull your house off the market when a serious buyer may appear on the horizon?

#4  Homes show better during the holidays

Most people beautifully decorate their homes for the holidays, fires are going in the fireplace, seasonal music is on the stereo, and even bad landscaping doesn’t show when its all covered with snow. A potential buyer will see your home decorated and be able to visualize how their family could have their next holiday event in your home.

#3 January is the month for transfers

Traditionally, January is the month for corporations to hire new employees for new jobs.  Since most tranferees cannot wait until spring to buy a new home, they must sell their home now, and buy during the holidays.

#2  Less competition

Jeanine Wells, president of the Topeka Area Association of Realtors, said Friday she was “very pleased” President Barack Obama had signed a $24 billion economic stimulus bill that, in part, extends tax incentives to prospective homebuyers.

The bill, signed by the president Friday, builds on provisions in the $787 billion stimulus package enacted this past February. It also includes tax cuts for struggling businesses and extends unemployment benefits to the longtime jobless.

“The tax credit is working locally,” Wells said, explaining that home sales grew 17 percent from September through October. “We’ve had five months in a row of steady improvement.”

Wells said home sales in February were down 20 percent to 22 percent from February 2008. Since then, the year-to-date gap has been narrowed to 11 percent.

The bill extends the popular $8,000 credit for first-time homebuyers included in February’s stimulus package. Wells said the credit, which was to expire Nov. 30, will be available through June as long as the buyer signs a binding contract by April 30.

The program was expanded to include a $6,500 credit for existing homeowners who buy a new place after living in their current residence for at least five years. She said the new home’s price is capped at $800,000.
Wells said adjusted gross income guidelines for those purchasing a new home were increased to $125,000 from $75,000 for a single person and to $225,000 from $150,000 for a married couple.

“That should include 75 percent of the population,” she said.

Prolonging the life of the homebuyer credit has been a priority of the real estate industry, which says it has been instrumental in beginning to turn around a market that was a major cause of the economic downturn. About 1.4 million first-time homebuyers have qualified for the credit through August, and the National Association of Realtors estimates 350,000 of them wouldn’t have purchased their homes without the credit.

About a month ago, regional Internal Revenue Service spokesman Michael Devine told The Topeka Capital-Journal that 13,789 Kansas taxpayers had filed claims for the first-time homebuyer tax credit.

In addition to real estate companies, Wells said home sales also benefit other businesses in the community, such as appraisers, title companies, lenders and home repair providers. For each home sold, she said, $63,000 is pumped back into the local economy.

Wells said she expects no more extensions of the tax credit to be approved.

“If you’re thinking of buying a home, act now,” she said.

Wells said more than 1,300 residential properties are on the market in the Topeka community, and interest rates are low, about 5 percent on a 30-year loan.

Courtesy of and written by JAN BILES of the Topeka Capitol Journal
The Associated Press contributed to this report.

Bringing the Dream of Homeownership Within Reach

As part of its plan to stimulate the U.S. housing market and address the economic challenges facing our nation, Congress has passed new legislation that:

• Extends the First-Time Home Buyer Tax Credit of up to $8,000 to first-time home buyers until April 30, 2010.
• Expands the credit to grant a $6,500 credit to current home owners purchasing a new or existing home between the date the bill is signed by President Obama and April 30, 2010.

Here is more information about how the Extended Home Buyer Tax Credit can help prospective home buyers become part of the American dream.

Who Qualifies for the Extended Credit?

• First-time home buyers who purchase homes between the date the bill is signed by President Obama and April 30, 2010.
• Current home owners purchasing a home between the date the bill is signed by President Obama and April 30, 2010, who have used the home being sold or vacated as a principal residence for five consecutive years within the last eight.

To qualify as a “first-time home buyer” the purchaser or his/her spouse may not have owned a residence during the three years prior to the purchase.

Which Properties Are Eligible?

The Extended Home Buyer Tax Credit may be applied to primary residences, including: single-family homes, condos, townhomes, and co-ops.

How Much Is Available?

The maximum allowable credit for first-time home buyers is $8,000.
The maximum credit allowed for current homeowners is $6,500.

How is a Buyer’s Credit Amount Determined?

Each home buyer’s tax credit is determined by tow additional factors:

1. The price of the home.
2. The buyer’s income.

Price

Under the Extended Home Buyer Tax Credit, credit may only be awarded on homes purchased for $800,000 or less.

Buyer Income

Under the Extended Home Buyer Tax Credit which is effective on the date the bill is signed by President Obama single buyers with incomes up to $125,000 and married couples with incomes up to $225,000—may receive the maximum tax credit.

These income limits have changed from the 2009 First-Time Home Buyer Tax Credit limits.

If the Buyer(s)’ Income Exceeds These Limits, Can He/She Still Get a Credit?

Yes, some buyers may still be eligible for the credit.

The credit decreases for buyers who earn between $125,000 and $145,000 for single buyers and between $225,000 and $245,000 for home buyers filing jointly. The amount of the tax credit decreases as his/her income approaches the maximum limit. Home buyers earning more than the maximum qualifying income—over $145,000 for singles and over $245,000 for couples are not eligible for the credit.

Can a Buyer Still Qualify If He/She Closes After April 30, 2010?

Under the Extended Home Buyer Tax Credit, as long as a written binding contract to purchase is in effect on April 30, 2010, the purchaser will have until July 1, 2010 to close.

Will the Tax Credit Need to Be Repaid?

No. The buyer does not need to repay the tax credit, if he/she occupies the home for three years or more. However, if the property is sold during this three-year period, the full amount credit will be recouped on the sale.

Copyright National Association of REALTORS®. Reprinted with permission

KANSAS CITY, Mo. (AP) — Home sales in the Midwest increased in September as a soon-to-expire tax credit for first-time buyers and glimmers of an economic recovery brought more people to the closing table.

The National Association of Realtors said Friday that there were an estimated 110,000 resales in the Midwest, up 5.8 percent from September last year. The median sale price for the region fell 1 percent to $147,600, marking the smallest decline in the country.

Nationally, home resales rose almost 8 percent from a year ago, without adjusting for seasonal factors. The median sale price fell 8.5 percent to $174,900, the Realtors association said.

To varying degrees, economists and local housing experts say the federal tax credit has boosted sales. First-time buyers can receive a credit of 10 percent of the sales price, up to $8,000. The real estate industry is pushing for Congress to extend the credit past the Nov. 30 deadline.

“I do think we’re going to see some real solid gains in the third quarter in the Midwest” because of the tax credit, said David E. Clark, economics department chairman at Marquette University in Milwaukee, Wis. “You’ll see that everywhere but especially here in the Midwest where our homes are already very affordable.”

The jobless rate in the Midwest dipped from 10 percent in August to 9.8 percent in September, the only region to show a decline last month. But the rate is still up from 6.4 percent in September last year as automotive layoffs took their toll.

Eight of the 12 major Midwestern cities tracked in the Associated Press-Re/Max Monthly Housing Report, also released Friday, showed annual increases in sales in September while all but three showed median sale price declines. The report analyzed sales transactions in the metropolitan statistical areas recorded by all real estate agents, regardless of company affiliation.

Here are some of the highlights from the region:

— Biggest sales gain: Fargo, N.D., saw the number of sales jump 23 percent from a year ago. Meanwhile, median price declines were moderate, slipping about 3 percent year-over-year to $139,950.

While the city had to deal with devastating floods this spring, it has so far avoided the economic tumult of other markets, said Kimberly Van Hal, a real estate agent with Coldwell Banker-First Realty.

North Dakota’s unemployment rate was far below the national average last month at 4.2 percent, which was only about 1 percentage point above a year ago.

Van Hal said the tax credit has made up a large part of recent sales, especially as the market’s average home price is well within the range of first-time home buyers.

“We really picked up speed and have been a very active market since early summer,” she said.

— Biggest sales loss: Sales in Cleveland, Ohio, were the worst in the region, falling almost 12 percent from a year ago. The median sales price, however, was stable, gaining almost 2 percent to $116,000.

The manufacturing-heavy city has suffered numerous plant closures and layoffs in recent years. Last month, the state lost about 6,000 jobs but its unemployment rate actually improved, which experts said came from discouraged workers leaving the work force.

Paul Hazlett, a Century 21 agent in the Cleveland suburb of Middleburg Heights, said homes still sell quickly if they’re not overpriced but a lot of sellers remain unrealistic. He has a contract pending on a home where the sales price is $15,000 below what the owner paid two years ago.

“On the west side of Cleveland, I’ve almost given up on the area because I get tired of people getting mad at me when I say what I think their property is worth,” Hazlett said.

— Biggest price gain: Indianapolis led the region with the median sale price tiptoeing forward more than 4 percent year-over-year to $120,000. Overall sales, however, continued to fall, declining almost 10 percent from September 2008.

Sharron Hill, with Hill & Associates in suburban Indianapolis, said the market has not seen much permanent appreciation in home values because of an uptick in foreclosed homes and what she considers poor appraisals. A recent appraisal reduced the value of one of her listings by $20,000, which she blamed on lenders overcorrecting for the mistakes that led to the housing bubble.

“Changes in the mortgage industry in the last 8 to 12 months is hurting the real estate industry more than anything,” she said.

She said sales have also struggled but would be far worse without the tax credit bringing new people into the market.

— Biggest price decline: Detroit continued to lead in an unfortunate trend as the median sale price dropped almost 22 percent from a year ago to $65,000. The lower prices have brought in investors and bargain-hunters, however, and sales rose more than 3 percent last month.

The city, hammered by losses in its key automotive industry, has seen massive numbers of foreclosures and distressed sales, which typically sell at a significant discount and make it virtually impossible for conventional sellers to get anywhere near what they want for their homes. Michigan has also struggled with job losses, posting the nation’s highest unemployment rate of 15.3 percent last month.

Thomas Bush of Real Estate One in Shelby Township, Mich., a Detroit suburb, said he estimates fewer than 10 percent of homes going on the market these days are conventional sales and prices are back to 20-year lows.

“I don’t think we’ve seen what the auto problems are doing to the market in Detroit,” he said. “We’re seeing the effects of bad mortgages, bad choices. What happens when all the other stuff comes?”

— Inventory highlight: The number of unsold homes fell in every Midwestern city last month from a year ago, according to the AP-Re/Max report. Indianapolis, Detroit and Cleveland led the region, with inventory drops of more than 29 percent each. Wichita, Kan., had the smallest, shaving just 0.2 percent off its backlog.

Housing experts say reducing the existing inventory of unsold homes is key to sustaining a resurgence in home prices.