Due to a shortage of U.S. manufactured drywall between 2004 and 2007, many builders were forced to buy drywall imported from China. The “Chinese drywall” has been linked to seeping sulfide gases that can corrode electrical wiring and components of air-conditioning and other household appliances. Some residents have been forced to move from their homes, and a few builders in Florida have begun gutting homes and replacing the drywall.

We have found some helpful information put out by the Florida Department of Health that may be help to answer some questions the public may have regarding if Chinese drywall is present in your home and what the health implications may be, as well as where to turn for help.

See Frequently Asked Questions:  Here is a sample question.

How do I know if I have “Chinese drywall”?

Unfortunately, there is no easy answer to this question. The most definitive method to date is finding a “made in China” marking on the back of sheet of drywall. DOH observed some drywall in several homes with no discernable markings. The origin of the unmarked drywall is unknown. DOH observed that homes with marked Chinese drywall also contained drywall marked as made in USA. Remember that we do not know how many sheets of the suspect drywall can cause problems. DOH did observe at least one home with marked Chinese drywall with none of the associated corrosion or odor problems. The bottom line is we think the question should really be “Does my house have corrosion problems?”

How to File a Consumer Complaint: Useful information on who to contact if you’d like to file a complaint.

Case Definition and Pictures (Does My home fit the investigation criteria?)

We will continue to provide additional information and resources as they become available.  You can also listen to The Future of Real Estate each week as we bring you important information and news regarding real estate in SW Florida.




The News Press is sponsoring an online marketing workshop for Realtors and other local business people that could help grow your online business.

On Tuesday, May 12 from 9am-11am Mike Blinder will deliver an excellent seminar for a small group of business people in the Lee County area (place TBD).

If you are interested in knowing more about Mike Blinder go to http://www.blindergroup.comand you will see enough to know that you want to be there.

Call your sales executive now to reserve your spot.

Here is an information sheet we found on the First Time Honme Buyer Tax Credit for home buyers in 2009.  Buyers in Cape Coral and Fort Myers have been buying real estate in March at a record rate, and many will be helped by this tax credit.  For some, the government will essentially be kicking in 10% of the purchase price.  Read below for details.  Always call the Ellis Team at RE/MAX Realty Group with your questions, or visit our website Topagent.com

 First-Time Home Buyer Tax Credit

Frequently Asked Questions About the Home Buyer Tax Credit

The American Recovery and Reinvestment Act of 2009 authorizes a tax credit of up to for

qualified first-time home buyers purchasing a principal residence on or after january 1. 2009 and before

December 1. 2009.

The following questions and answers provide basic information about the tax credit. If you have more

specific questions. we strongly encourage you to consult a qualified tax advisor or

about your unique situation.

1.     Who is eligible to claim the tax credit?

First~time home buyers purchasing any kind of home-new or resale-are eligible for the tax credit. To

qualify for the tax credit, more about which you can find if you look here, a home purchase must occur on or after January 1, 2009 and before December 1, 2009. For the purposes of the tax credit, the purchase date is the date when closing occurs and the title to the property transfers to the home owner with the help of property conveyancing services. 

2.     What is the definition of a first-time home buyer?

The law defines “first~time home buyer” as a buyer 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. However, unmarried joint purchasers may allocate the credit amount to any buyer who qualifies as a first~time buyer, such as may occur if a parent jointly purchases a home with a son or daughter. Ownership of a vacation home or rental property not used as a principal residence does not disqualify a

buyer as a first-time home buyer.

1                     How is the amount of the tax credit determined? The tax credit is equal to 10 percent of the home’s purchase price up to a maximum of $8,000.

2                     Are there any income limits for claiming the tax credit? Yes. The income limit for single taxpayers is $75,000; the limit is $150,000 for married taxpayers filing a joint return. The tax credit amount is reduced for buyers with a modified adjusted gross income (MAGI) of more than $75,000 for single taxpayers and $150,000 for married taxpayers filing a joint return. The phaseout range for the tax credit program is equal to $20,000. That is, the tax credit amount is reduced to zero for taxpayers with MAGI of more than $95,000 (single) or $170,000 (married) and is reduced proportionally for taxpayers with MAGis between these amounts.

3                     What is “modified adjusted gross income”? Modified adjusted gross income or MAGI is defined by the IRS. To find it, a taxpayer must first determine


“adjusted gross income” or AGio AGI is total income for a year minus certain deductions (known as

“adjustments” or “above-the-line deductions”), but before itemized deductions from Schedule A or



personal exemptions are subtracted. On Forms 1040 and 1040A, AGI is the last number on page 1 and first number on page 2 of the form. For Form 1040-EZ, AGI appears on line 4 (as of 2007). Note that AGI

includes all forms of income including wages, salaries, interest income, dividends and capital gains.

To determine modified adjusted gross income (MAGI), add to AGI certain amounts such as foreign

income, foreign~housing deductions, student~loan deductions, IRA-contribution deductions and deductions for higher-education costs.

6. If my modified adjusted gross income (MAGI) is above the limit, do I qualify for any tax credit? Possibly. It depends on your income. Partial credits of less than $8,000 are available for some taxpayers whose MAGI exceeds the phaseout limits.

7. Can you give me an example of how the partial tax credit is determined?

Just as an example, assume that a married couple has a modified adjusted gross income of $160,000.

The applicable phaseout to qualify for the tax credit is $150,000, and the couple is $10,000 over this

amount. Dividing $10,000 by the phaseout range of $20,000 yields 0.5. When you subtract 0.5 from 1.0,

the result ;s 0.5. To determine the amount of the partial first-time home buyer tax credit that is available

to this couple, mUltiply $8,000 by 0.5. The result is $4,000.

Here’s another example: assume that an individual home buyer has a modified adjusted gross income of

$88,000. The buyer’s income exceeds $75,000 by $13,000. Dividing $13,000 by the phaseout range of $20,000 yields 0.65. When you subtract 0.65 from 1.0, the result is 0.35. Multiplying $8,000 by 0.35 shows that the buyer is eligible for a partial tax credit of $2,800.

Please remember that these examples are intended to provide a general idea of how the tax credit might

be applied in different circumstances. You should always consult your tax advisor for information relating to your specific circumstances.

8. How is this home buyer tax credit different from the tax credit that Congress enacted in July of 2008? The most significant difference is that this tax credit does not have to be repaid. Because it had to be

repaid, the previous “credit” was essentially an interest~free loan. This tax incentive is a true tax credit. However, home buyers must use the residence as a principal residence for at least three years or face

recapture of the tax credit amount. Certain exceptions apply.

9. How do I claim the tax credit? Do I need to complete a form or application?

Participating in the tax credit program is easy. You claim the tax credit on your federal income tax

return. Specifically, home buyers should complete IRS Form 5405 to determine their tax credit amount,

and then claim this amount on Line 69 of their 1040 income tax return. No other applications or forms are required, and no pre~approval is necessary. However, you will want to be sure that you qualify for

the credit under the income limits and first-time home buyer tests. Note that you cannot claim the credit

on Form 5405 for an intended purchase for some future date; it must be a completed purchase.

10. What types of homes will qualify for the tax credit? Any home that will be used as a principal residence will qualify for the credit. This includes single-family detached homes, attached homes like townhouses and condominiums, manufactured homes (also known as mobile homes) and houseboats. The definition of prinCipal residence is identical to the one used to determine whether you may qualify for the $250,000 I $500,000 capital gain tax exclusion for principal residences.



11. I read that the tax credit is “refundable.” What does that mean? The fact that the credit is refundable means that the home buyer credit can be claimed even if the taxpayer has little or no federal income tax liability to offset. Typically this involves the government

sending the taxpayer a check for a portion or even all of the amount of the refundable tax credit.

For example, if a qualified home buyer expected, notwithstanding the tax credit, federal income tax

liability of $5,000 and had tax withholding of $4,000 for the year, then without the tax credit the taxpayer would owe the IRS $1,000 on April 15th. Suppose now that the taxpayer qualified for the $8,000 home buyer tax credit. As a result, the taxpayer would receive a check for $7,000 ($8,000 minus the $1,000 owed).

12. I purchased a home in early 2009 and have already filed to receive the $7,500 tax credit on my 2008 tax returns. How can I claim the new $8,000 tax credit instead? Home buyers in this situation may file an amended 2008 tax return with a 1040X form. You should

consult with a tax advisor to ensure you file this return properly.

13. Instead of buying a new home from a home builder, I hired a contractor to construct a home on a lot that I already own. Do I still qualify for the tax credit? Yes. For the purposes of the home buyer tax credit, a principal residence that is constructed by the

home owner is treated by the tax code as having been “purchased” on the date the owner first occupies

the house. In this situation, the date offirst occupancy must be on or after January 1, 2009 and before

December 1, 2009.

In contrast, for newly-constructed homes bought from a home builder, eligibility for the tax credit is

determined by the settlement date.

14. Can I claim the tax credit if I finance the purchase of my home under a mortgage revenue bond (MRB) program? Yes. The tax credit can be combined with the MRB home buyer program. Note that first-time home buyers who purchased a home in 2008 may not claim the tax credit if they are participating in an MRB


15. I live in the District of Columbia. Can I claim both the Washington, D.C. first-time home buyer credit and this new credit? No. You can claim only one.

16. I am not a U.S. citizen. Can I claim the tax credit? Maybe. Anyone who is not a nonresident alien (as defined by the IRS), who has not owned a principal residence in the previous three years and who meets the income limits test may claim the tax credit for a qualified home purchase. The IRS provides a definition of “nonresident alien” in IRS Publication 519.

17. Is a tax credit the same as a tax deduction? No. A tax credit is a dollar-for-dollar reduction in what the taxpayer owes. That means that a taxpayer who owes $8,000 in income taxes and who receives an $8,000 tax credit would owe nothing to the IRS.

A tax deduction is subtracted from the amount of income that is taxed. Using the same example, assume

the taxpayer is in the 15 percent tax bracket and owes $8,000 in income taxes. If the taxpayer receives an

$8,000 deduction, the taxpayer’s tax liability would be reduced by $1,200 (15 percent of $8,000), or

lowered from $8,000 to $6,800.

http://www.federalhousingtaxcredit.com/2009 /print. php ?page=faq. php



18. I bought a home in 2008. Do I qualify for this credit? No, bullf you purchased your first home between April 9, 2008 and January 1, 2009, you may qualify for a different tax credit

19. Is there any way for a home buyer to access the money allocable to the credit sooner than waiting to file their 2009 tax return? Yes. Prospective home buyers who believe they qualify for the tax credit are permitted to reduce their Income lax withholding. Reducing tax withholding (up to Ihe amount of the credit) will enable the buyer to accumulate cash by raising his/her take home pay. This money can then be applied 10 the down payment.


Buyers should adjust their withholding amount on their W-4 via their employer or through Iheir quarterly estimated tax payment. IRS Publication 919 contains rules and guidelines for income tax withholding. Prospective home buyers should note Ihat if income tax withholding Is reduced and the tax credit qualified purchase does not occur, then the individual would be liable for repayment to the IRS of

income tax and possible interest charges and penalties.

Further, rule changes made as part of the economic stimulus legislation allow home buyers to claim the

tax credit and participate in a program financed by tax-exempt bonds. Some state housing finance

agencies, such as the Missouri Housing Development Commission, have introduced programs that provide shortRterm credit acceleration loans that may be used to fund a downpayment. Prospective

home buyers should inquire with their state housing finance agency to determine the availability of such

a program in their community_

The National Council of State Housing Agencies (NCSHA) has compiled list of such programs, which can be found here.

20. If I’m qualified for the tax credit and buy a home in 2009, can I apply the tax credit against my 2008 tax return? Yes. The law allows taxpayers to choose (“elect”) to treat qualified home purchases in 2009 as if the purchase occurred on December 31, 2008. This means that the 2008 income limit (MAGI) applies and the election accelerates when the credit can be claimed (tax filing for 2008 returns instead of for 2009 returns). A benefit of this election is that a home buyer in 2009 will know their 2008 MAGI with certainty, thereby helping the buyer know whether the income limit will reduce their credit amount.

Taxpayers buying a home who wish to claim It on their 2008 tax return, but who have already submitted their 2008 return to the IRS, may file an amended 2008 return claiming the tax credit. You should consult

with a tax professional to determine how to arrange this.

21. For a home purchase in 2009, can I choose whether to treat the purchase as occurring in 2008 or 2009, depending on in which year my credit amount is the largest? Yes, If the applicable income phaseout would reduce your home buyer tax credit amount in 2009 and a larger credit would be available using the 2008 MAGI amounts, then you can choose the year that yields the largest credit amount.

This week’s SW Florida real estate video update presented by The Ellis Team at RE/MAX Realty Group focuses on SE Fort Myers Florida.  SE Fort Myers consists of zip codes 33912, 33913, 33966, and 33967 and covers Gateway, Fort Myers South around the Daniel’s Parkway Corridor over to US 41 down tthrough San Carlos Park.

SE Fort Myers Florida Real Estate Video Update

View this week’s SE Fort Myers Florida Real Estate Video Update  Average prices were down about 22% in SE Fort Myers, however sales were up significantly.

Current Market Index-SW Florida Real Estate-March 2009
Current Market Index-SW Florida Real Estate-March 2009

The March 2009 Ellis Team SW Florida real estate Current Market Index covering Fort Myers, Cape Coral, Bonita Springs, Estero, Ft Myers Beach, Sanibel and Captiva Islands, and Lehigh Acres Florida improved again as sales activity has really taken off in the past 6 months.  The Index now stands at 4.41 for Cape Coral and Fort Myers, and stands at 5.07 for the entire Lee County Florida.

Inventory levels countywide hade dropped to just slightly over 13,000 while pending sales have shot up to 2,567, and increase of 22.53% since last month.  The market is absorbing new inventory.  This 2009 season has been as good as predicted.  remember, the Current Market Index is a forward looking indicator, and home sales have been bearing that out each and every month as we’ve been reporting.

Cape Coral again leads the way.  The CMI numbers for Cape Coral are 3.45, the best in SW Florida.  Condo numbers were down to 10.90, down from 13.08 in February, another positive sign.  We do see some serious trouble on the horizon for the condo market in SW Florida we’ll be reporting on later.

This week’s SW Florida real estate video update presented by The Ellis Team at RE/MAX Realty Group focuses on cape Coral Florida.  Cape Coral is leading sales transactions in Lee County due to the number of foreclosures and short sales bringing affordability back into the SW Florida real estate market.

Cape Coral Real Estate Video Update

View This Week’s Cape Coral Video Update.

Check out the entire SW Florida real estate State of the Market Report

Brett Ellis from the Ellis Team at RE/MAX Realty Group specializes in selling homes in Cape Coral Florida, Fort Myers, Lehigh Acres, onita Springs, and all of SW Florida.  Brett created another weekly video update and tells a little about what he presented last week at the Annual State of the Market Report presentation at the SW Florida Real Estate Investors Asociation meeting.

Yesterday Brett Ellis of the Ellis TEAM at RE/MAX delivered the SW Florida State of the Market Report to the public.  The report is 77 pages and includes data on Lee County Florida home sales, including Cape Coral real estate sales numbers, Fort Myers real estate sales numbers and pricing trends, Bonita Spring real estate updates, Estero, Lehigh Acres, Fort Myers Beach, Sanibel and Captiva, Pine Island, and all of Lee Couny.

The report shows single family home inventory in Lee County Florida declined 15.61%, and months supply of inventory in Lee County declined 42.66% due to decreasing inventory and increasing sales.

Cape Coral is the hot spot for sales activity, with 4,633 sales and less than a 1 yr supply of inventory.  Lee County overall inventory level stands at 17.53 months, down from 30.57 last year.  Median single family home sale prices were down 37.89%.  Two areas actually saw a rise in mean average sales prices in 2008; Bonita Spring-Estero and Central Fort Myers.

The report provides insightful data at the county level, and at the neighborhood level, as well as foreclosure data.  The sub-markets we analyzed were Cape Coral North, Cape Coral Central, Cape Coral South, North Fort Myers, Central Fort Myers, SE Fort Myers, SW Fort Myers, Lehigh Acres, East Fort Myers including Alva, Bonita-Estero, Pine Island, Fort Myers Beach, and Sanibel and Captiva Islands.  We provide data such as monthly pricing graphs for 2008, monthly sales charts, List price to sales price ratios, months supply of inventory levels, total list and sales volume,Minimum listing, maximum listing, lowest sold listing, highest sold listing, median price, average price, and total sales.

It is our most detailed report yet.  We scrutinized the data from multiple MLS boards and eliminated duplicates.  This one of a kind database is more thorough and accurate than services such as MLS Alliance because some boards pull their data out of the Alliance.  Additionally, we scrubbed the data for known errors.  We allowed duplicates when there were actually multiple sales on the same property for the same year.

73% of foreclosures in SW Florida were non-homestaeded property, meaning investors walked from their investments when the value fell below what they owed.  Most investors were planning to flip for a profit when they purchased.  SW Florida bank foreclosures were absorbed and sold, and inventory fell as the market heated up, even if prices have not.

We’ll add video of news stories from the report in coming days.

The 2009 Ellis Team annual SW Florida State of the Market Report will be released February 18, 2009 at the general meeting of the Southwest Florida Investment Association.  It is located at Island Park Bridge Club – 16520 S Tamiami Trl # 16 Fort Myers, FL 33908

The format has changed from last year’s format. This year we’ll address the following topics:

  • Sales Trends by Area
  • Pricing Trends by Area
  • Lee County Pricing Trends by Month
  • Lee County Sales Trends by Month
  • Median Prices Vs. Avg Prices
  • $ Volume of Sales by Area
  • Find Out Which Areas are Selling
  • Identify Where the Deals Are
  • How Will Recent Lending Changes Affect Investors
  • How Will Recent Guidelines Affect Condo Sales
  • Don’t Follow the Herd-Be the First to Know How This Market is Changing and Capitalize
  • Get the Facts-Don’t believe Everything You Read
  • Find out How the Stimulus Package Could Affect Our Market
  • What Does the Latest Current market Index Predict for our Market
  • Should you be Positive or Negative in 2009
  • Ask Questions-Only Even of it’s Kind Where You can ask the Experts Questions

Compare areas such as Fort Myers, Cape Coral, Estero, Bonita Springs, Lehigh Acres, Sanibel-Captiva, Pine Island and see how your area is doing.

This year we’ve compiled two independent sets of data.  The first is the most exhaustive set ever compiled.  We tool MLS data from multiple sources, compared for duplicates, and deleted, and scrubbed the data for known errors.  We used this data to compile a comprehensive database.  Secondly, Jeff Tumbarello has compiled the area’s finest foreclosure database.  This year we have analysed both sets of data and we’ll be able to compare and contrast the two independent empirical sets.  Foreclosures have affected the real estate market, and by analysing the two together we’ll be better able to illustrate past trends, future trends, and show how the cause and effect is influencing the other.  We look forward to demonstrating the lagging and leading indicators in this market, and how you can plan to take advantage of this knowledge.

Click here for more information on attending the SW Florida Real Estate Investors Association meeting and viewing the Annual State of the market Report. 

The latest industry asking for government handouts is the auto industry, which will probably be followed by the airline industry in short order.  It seems everyone is lining up for the government to bail them out, and the government seems to oblige citing what a tremendous harm letting them fail would do to our economy.  How we will pay for all this is not the topic of this discussion, as that would take a series of articles and discussions on it’s own.

Rather I would like to discuss the notion of CEO pay and union perks.  In past buyouts, politicians have been quick to limit CEO pay when the government is being asked to fork over US tax dollars to assist in saving a company.  I think this is a good idea.  I hate to see some wealthy CEO making millions with a golden parachute simply for running a company that would be bankrupt if not for a government bailout, and using US tax dollars to get that golden treasure chest at the end of the rainbow.  Probably only CEO’s would argue with that logic.

Now comes the tricky part.  Unions back politicians.  Unions like to secure jobs for Americans, and pay for it’s workers.  The problem is twofold at least, and this is why politicians have a problem this time around.

1.  Unions derive their power from the workers and use it with politicians.  Money is often funneled into campaigns, and there has been legislation about whether money can help fund a candidate.  Certain candidates have taken union money, and have been endorsed by certain unions.  Politicians in result feel obliged to protect unions as union’s helped bring them to power, so in essence certain politicians derive their power from the unions themselves.

2.  While unions have helped protect US workers in many respects from greedy companies who’d just as soon pay as little as possible to workers to maximize profits, unions may also be the very thing that is driving jobs overseas and making US automakers anti-competitive.  Now unions will argue that they protect jobs by not allowing companies to close plants or layoff people except under harsh circumstances.  The reality is when buyers do not purchase US cars because they don’t offer the value a buyer is looking for, being anti-competitive does help push jobs overseas to automakers who are making cars people want to buy.

I know many union workers here in the US make over $100,000 per year and work about 6 months a year when you add up all the days off and closed plant days.  The unions negotiated such a good contract that our workers are protected.  But are they really?  When you negotiate something so good for our workers that it causes our auto companies to be anti-competitive and bankrupts a business, is that really good for our workers long-term?

I would suggest that there may be a role for our unions, but they too must get into the 21st century and not demand so much from business that the business itself cannot sustain.  GM and Ford have lost money for years, but because investors have kept investing in the companies they’ve maintained financing and cash.  Those days are over now.  The companies themselves must be competitive on the world stage, or we don’t really need them.  This is unfortunate to say, because I believe we do need them and should have them.  But we cannot keep doing business in an anti-competitive way and expect to keep jobs here in US.

It’s sort of like states taxation rules.  When one state offers tremendous tax incentives over other states, companies consider moving to another state.  Why do you think so many corporations are in DE and SD?  I’ve been told it’s because of corporate and tax laws those states have offered in the past.  The same is true in business.  US wages may be higher, and that’s OK because our workers may be more productive.  But when you add on anti-competitive practices on top of higher wages, you wonder why worldwide buyers don’t always buy American, and in fact many American’s don’t buy American.  We’re just at a very competitive disadvantage, and it’s a shame because Detroit is starting to crank out cars people want to buy.

So here comes the big dilemma, and this is important as we discuss bailout terms, and it is the elephant in the room you’ll never hear a politician talk about because of the money and power involved in campaigns and unions.  We’ve got to work on limiting CEO pay in these bailouts, and that’s popular with the people because everyone understands that.  Before we give handouts to auto companies, we’ve also got to address a root of the problem, which is that our union contracts with these auto companies have placed them in a precarious and anti-competitive position.  It is unfair to our workers to give them contracts that work them right out of a job.

Before our government forks over more truckloads of good money after bad, let’s address a root problem and renegotiate some of these contracts so these companies can make it long-term.  After all, they are asking for US tax payer money now.  They didn’t make it on their own, so let’s try to fix what didn’t work before we give money to this situation.  True, some jobs may be lost and some perks may be lost, but this is better than losing an entire industry and all the jobs being lost.  The unions may lose some power, but how much power will they have if we lose an entire industry?

Nobody is against the American worker, and it’s quite possible reworking some of these contracts now will be the only thing that may save some of the American workers.  You cannot guarantee a job to somebody if you can’t sell a product people want to buy and make a profit doing so.  We’re in a world market, like it or not, and that old philosophy’s days are not only numbered, but this financial crisis has proved that it’s days actually ran out long ago and we’re just now at the crossroads today.  Let’s all work together to fix this mess instead of blaming everybody else.  Just fix it, and let’s keep many of those jobs right here in the US.  If we don’t, those jobs won’t be here forever, even with a bailout, because bailouts only provide financing for a short period of time and we’ll be right back here bailing them out a 2nd and 3rd time later on.

And let’s see if the politicians address this issue like they do the CEO pay issue.  Similar principle, but much difference in terms of how politicians get elected, so don’t bet on it.  How the economy and jobs go so goes the housing market, so these decisions do affect housing markets.