Thursday, November 5, 2009

Tax Credit Extension and Expansion Passes in Congress

In a major victory for NAHB that will boost the fledgling housing recovery and help struggling business owners nationwide, Congress today approved legislation that will extend the first-time home buyer tax credit beyond its Nov. 30 deadline and expand it to a wider group of home buyers. The bill also provides relief to cash-strapped home builders by providing broader tax benefits for businesses with net operating losses (NOLs).

The legislation, which will be signed into law shortly by President Obama, will extend the $8,000 credit for first-time home buyers for sales contracts entered into by April 30, 2010 and closed by June 30. Further, it has been expanded to include a new $6,500 credit for owners of existing homes who are purchasing a new principal residence. An existing home owner can claim the $6,500 tax credit if they have been residing in their principal residence for five consecutive years out of the last eight.

In more good news, the income eligibility limits to claim the full credit amount for both groups of home buyers have been raised from $75,000 for single taxpayers and $150,000 for married taxpayers filing a joint return to $125,000 for individuals and $225,000 for married couples. NAHB’s consumer-oriented Web site,, will provide complete details on the enhanced home buyer tax credit after the bill is signed into law by the President.

Thank you to all who wrote or called your Congressional representatives to let them know how important this legislation is to the housing industry!

For more on this from NAHB, click here.

Remodeling Activity Remains Relatively Stable

According to a report by Construction Week, Remodeling has remained a relatively stable component of the Upstate Housing industry. For the year ended September 30, 2009, the number of permits pulled for Remodeling Projects exceeding $25,000 has dropped just 15 percent from the same period the previous year. And remodeling activity in 2009 is ahead of the pace of activity in 2006, 2005, and 2004.

For Greenville, Anderson, Spartanburg, Pickens, and Oconee counties, remodeling permit activity for the year ended September 30 is as follows:

2004 — 497 permits
2005 — 456 permits
2006 — 557 permits
2007 — 626 permits
2008 — 669 permits
2009 — 571 permits

Customer Service Course Scheduled for December 10

Your HBA of Greenville will be offering a Customer Service course via webcast on Thursday, December 10 at the HBA office.

Make your business grow by keeping your clients happy during and after the sale. This course teaches you how to manage every phase of customer interaction from the initial contact through construction, the warranty period and beyond. Keep your customers satisfied with planning, execution and follow-up of your projects and they'll be spreading good news about you and your company for a long time to come. As a graduate of this course, you'll be able to:

Understand customer expectations and behaviors
Set appropriate service criteria
Establish quality standards and communicate them
Administer the customer service process
Know your obligations for warranty service and fulfill them
Enhance your repeat and referral sales

The course will be taught via webcast by Beverly Koehn, CGA, CGB, GMB, CAPS, CSP, MIRM.

It counts toward designation credit for CGA, CGB, CGR, MSCP, and SCCMB. Continuing education credit for: CAPS, CGA, CGB, CGR, GMB, MIRM, CMP, CSP, MSCP and SCCMB.

This course is $155 for members of the HBA of Greenville or other NAHB-affiliated associations. Non-members are $245. Fee includes course materials, lunch and light snacks during the day. You also will have access to open Wi-Fi at the office so you can work while you learn.

Download the course brochure at, or register online at

Wednesday, November 4, 2009

IRS to Audit Large Companies on Tax, Independent Contractor Issues

U.S. tax authorities will start to audit 6,000 randomly selected companies to focus on employment tax issues ranging from executive compensation to fringe benefits, Internal Revenue Service officials said.

The audits will begin in February 2010 and stretch across all types and sizes of companies. The exams will be deeper than typical audits, and also look at the use of independent contractors and other worker classification issues, a spokesman for the IRS said on Friday.

IRS Commissioner Douglas Shulman has said the agency will focus on the wealthy and large corporations as it seeks to recover billions that go unpaid in taxes each year.

About $345 billion goes uncollected from individuals and corporations from U.S. tax authorities each year, according to the U.S. government.

"A significant portion'' of this so-called tax gap comes from unpaid employment taxes, Faris Fink, an IRS deputy commissioner told an accounting conference this week.

Asked how many years the IRS would look at when conducting an audit, Fink said there was no defined time period.

The IRS has not zeroed in on employment tax issues for two decades, according to Anne Batter, an attorney who previously worked in the office of chief counsel at the IRS.

Although the program has not officially started yet, Batter says some of her clients who are large employers have begun to get document requests from the agency.

"The first round of questions we got in this last audit involved deferred compensation, equity, all these fringe benefits,'' said Batter, now with law firm Miller Chevalier, defending clients before the IRS.

"We have definitely had some taxpayers out of the blue (who) have gotten these really big, cumbersome requests for information about their compensation,'' she said.

Source: Insurance Journal

Eisenberg Presents Economic Impact Study to HBA of Greenville Members

Elliot Eisenberg, Senior Economist with NAHB, presented a study on the economic impact of home building in Greenville last Friday at the Fall Southern Home & Garden Show Preview Luncheon. Here's a brief synopsis:

For citizens of Greenville County, housing equals jobs. Here's why:

The home building industry generates substantial local economic activity, including new income and jobs for residents and additional revenue for local government. According to a recent economic impact study presented by Elliot Eisenberg of the National Association of Home Builders (NAHB) in October of 2009, the home building industry's footprint on Greenville County goes far beyond the construction itself. When income earned from construction activity is spent and recycles in the local economy, everyone benefits.

New homes create new jobs, and new opportunities for new residents to move into the Upstate.

The report estimates that 5,388 local jobs are created from building 1,852 single-family homes, based on construction activity from 2008. Multifamily housing (apartment units, downtown condos, etc.) create an additonal 1,193 local jobs, based on building 532 multifamily units. The initial economic impact of building these homes is nearly $378 million. The additional, reoccuring annual impact of these homes is $59 million per year.

Nationally, according to economists at NAHB, three full-time jobs are created for every new single-family home built. These jobs help all of us gain job security and enjoy a healthier economy.

For more, and a copy of the study on the economic impact of home building in Greenville presented last Friday, click here.

Monday, November 2, 2009

Greenville in Top Third of Nation's Affordable Housing Markets

Greenville's home prices remain more affordable than in two-thirds of the cities in a national housing index.

The 2009 Coldwell Banker Home Price Comparison Index ranked Greenville in the top one-third of affordable housing markets in the nation with an average home price of $214,116 for a 2,200 square foot home.

The Coldwell Banker data affirms the observation in last summer's S.C. Housing Market Report from the Moore School of Business that "the high affordability of housing in South Carolina will mean that the housing industry will be among the first industries to experience growth as the economy recovers."

The HPCI is an annual study released by Coldwell Banker Real Estate LLC that provides a comparison of similar 2,200 square foot, four-bedroom, 2.5 bath homes among 310 U.S. markets.

Coldwell Banker Caine of Greenville participated locally in the study that provides insight into the affordability of homes nationwide. This year's study ranked Greenville No. 103 in affordability, almost $150,000 below the national average of $363,460.

"The Upstate continues to provide a wide range of affordable housing options," said Brad Halter, president of Coldwell Banker Caine. "This affordability, along with low interest rates and tax incentives, provides first-time home buyers and move-up buyers with a unique opportunity to take advantage of Greenville's current housing market." Halter said the study also shows that Greenville's homes are maintaining their value.

Source: GSA Business

American Homes are Getting Smaller

In a reversal of a decades-long trend, the median size of new houses in the U.S. shrank last year, and the downsizing continues in 2009. New houses under construction through June were nearly 200 square feet smaller than two years ago. Has the McMansion era come to an end?

Jeffrey Mezger, CEO of residential construction giant KB Home, thinks so. "We were in the most overheated housing market the country has ever seen, and I don't think it will revert back to that any time soon," he says.

Eric Belsky, executive director of the Joint Center for Housing Studies at Harvard University, says that's a good thing: Smaller houses suited to first-time buyers could help the struggling construction sector rebound faster. "Demand has shifted from people looking to trade up to larger homes to first-time buyers who are typically younger, with less income, looking for a place that is more modest," he says.

Smaller houses are also attractive to empty-nesters looking for places that are more energy efficient and less expensive to maintain, according to Stephen Melman, an economist with the National Association of Home Builders. "People want to buy only the home they need right now," Melman says. "They're not going for an extra 1000 square feet anymore."

Yet, by any international measure, American homes are still extra-large: Average new-home size peaked here in 2007 at 2521 square feet. At that time, the average house in Germany and France was about 1200 square feet; in England it was 900 square feet.

Source: Parade Magazine, October 11, 2009 issue