I thought you might like to read this. Just to pass on some real experience of my client in the Bay Area housing market, even in Livermore! It is a mixed bag situation and usually depicts a great momentum changes around the elbow of a growth curve. Time to act decisively in good potential neigborhoods.
"One of my older relatives are looking to relocate to the bay area. They are in the 80s age group. They are looking for a starter home 3 bed/2bath preferably 500,000. They are keen on a single family home with some garden. A good neighborhood with families is critical.
...........
After looking at many south bay neighborhoods, we settled on South Livermore. I had never visited south Livermore before but we found it to have several nice neighborhoods and a cute but small downtown. These areas are closer to the south end where the vineyards are located (off 84) and there were also some good areas closer to the Livermore labs. We increased our budget a little bit and found very nice homes in very desirable neighborhoods. We were really surprised at how fast the homes was selling. One we really liked but was on a busy street sold on the afternoon, which we saw only in the morning. A couple of homes sold before we could even get to see them. These houses were about 1-8 DOM before they were sold. Makes me wonder about the downturn.
Anyway, we found our home and the sellers have accepted with one condition. They want to exclude their redwood deck from the inspection. What would the implications of this? If the risk is a few thousand $, then we can take the risk. However, unsure what larger implication this has."
Showing posts with label market update. Show all posts
Showing posts with label market update. Show all posts
Tuesday, September 28, 2010
Sunday, July 26, 2009
Find out where mortgage rates, home sales, and the median price are headed
Find out where mortgage rates, home sales, and the median price are headed. The Association recently released a mid-year update of our 2009 Housing Market Forecast. Click here to view.
Tuesday, July 21, 2009
Bay Area Home Sales and Median Price Rise
Home sales in the Bay Area jumped to their highest level in almost three years, the result of improved mortgage availability and a perception among potential buyers that prices have bottomed out. The median price paid for a home increased month-to-month for the third month in a row, a real estate information service reported.
A total of 8,644 new and resale houses and condos sold across the nine-county Bay Area in June. That was up 16.1 percent from 7,447 in May and up 20.4 percent from 7,178 in June 2008, according to San Diego-based MDA DataQuick.
Home sales have increased on a year-over-year basis the last ten months. June sales have varied from a low of 7,118 in 1993 to 15,735 in 2004 in DataQuick’s statistics, which go back to 1988. Last month was 16.1 percent below the 10,306 for an average June.
“Getting mortgage financing this last year has really been an egregious process, especially for borrowers in the upper half of the market. We’re just now seeing the beginnings of more normal mortgage lending patterns. There’s still a long way to go, but it looks like the worst of the grind is over,” said John Walsh, MDA DataQuick president.
The median price paid for all new and resale houses and condos sold in the nine-county Bay Area was $352,000 last month, up 3.1 percent from $341,500 in May and down 27.4 percent from $485,000 in June 2008. It was the highest since $375,000 last October.
The current median is 47.1 percent below the $665,000 peak reached in June 2007. It hit a low of $290,000 in March this year. About half the downturn appears to be price declines, the other half is the absence of of high-end home sales in the statistics, which pulls the median down.
Financing with home loans above the old “jumbo” limit of $417,000 edged up to the highest level in almost a year. Last month 28.8 percent of all Bay Area mortgages were jumbos, the highest since 31.9 percent in August last year and well above the bottom of 17.1 percent last January. Two years ago jumbos accounted for more than 60 percent of all home purchase loans.
Bank of America and Wells Fargo are the two most active lenders in the Bay Area with 30 percent of the market between them.
Use of government-insured FHA loans – a common choice among first-time buyers – represented 24.1 percent of all Bay Area purchase loans in June, down from a record 26 percent in April but up from 10.7 percent a year ago.
MDA DataQuick is a division of MDA Lending Solutions, a subsidiary of Vancouver-based MacDonald Dettwiler and Associates. MDA DataQuick monitors real estate activity nationwide and provides information to consumers, educational institutions, public agencies, lending institutions, title companies and industry analysts. Because of late data availability, sales counts were estimated in Alameda County.
Last month 37.3 percent of all homes resold in the Bay Area had been foreclosed on in the prior 12 months, down from 40.5 percent in May and the lowest since 36.0 percent in August 2008. The peak was 52.0 percent in February this year. By county, foreclosure resales ranged last month from 6.3 percent of all resales in Marin to 62.7 percent in Solano.
The typical monthly mortgage payment that Bay Area buyers committed themselves to paying was $1,585 last month, up from $1,443 the previous month, and down from $2,407 a year ago. Adjusted for inflation, current payments are 39.7 percent below typical payments in the spring of 1989, the peak of the prior real estate cycle. They are 55.4 percent below the current cycle's peak in July 2007.
Indicators of market distress continue to move in different directions. Foreclosure activity remains near record levels, while financing with adjustable-rate mortgages is near the all-time low but has recently edged higher. Financing with multiple mortgages is low, down payment sizes and flipping rates are stable, and non-owner occupied buying is above-average in some markets, MDA DataQuick reported.
Source: MDA DataQuick Information Systems, www.DQNews.com
A total of 8,644 new and resale houses and condos sold across the nine-county Bay Area in June. That was up 16.1 percent from 7,447 in May and up 20.4 percent from 7,178 in June 2008, according to San Diego-based MDA DataQuick.
Home sales have increased on a year-over-year basis the last ten months. June sales have varied from a low of 7,118 in 1993 to 15,735 in 2004 in DataQuick’s statistics, which go back to 1988. Last month was 16.1 percent below the 10,306 for an average June.
“Getting mortgage financing this last year has really been an egregious process, especially for borrowers in the upper half of the market. We’re just now seeing the beginnings of more normal mortgage lending patterns. There’s still a long way to go, but it looks like the worst of the grind is over,” said John Walsh, MDA DataQuick president.
The median price paid for all new and resale houses and condos sold in the nine-county Bay Area was $352,000 last month, up 3.1 percent from $341,500 in May and down 27.4 percent from $485,000 in June 2008. It was the highest since $375,000 last October.
The current median is 47.1 percent below the $665,000 peak reached in June 2007. It hit a low of $290,000 in March this year. About half the downturn appears to be price declines, the other half is the absence of of high-end home sales in the statistics, which pulls the median down.
Financing with home loans above the old “jumbo” limit of $417,000 edged up to the highest level in almost a year. Last month 28.8 percent of all Bay Area mortgages were jumbos, the highest since 31.9 percent in August last year and well above the bottom of 17.1 percent last January. Two years ago jumbos accounted for more than 60 percent of all home purchase loans.
Bank of America and Wells Fargo are the two most active lenders in the Bay Area with 30 percent of the market between them.
Use of government-insured FHA loans – a common choice among first-time buyers – represented 24.1 percent of all Bay Area purchase loans in June, down from a record 26 percent in April but up from 10.7 percent a year ago.
MDA DataQuick is a division of MDA Lending Solutions, a subsidiary of Vancouver-based MacDonald Dettwiler and Associates. MDA DataQuick monitors real estate activity nationwide and provides information to consumers, educational institutions, public agencies, lending institutions, title companies and industry analysts. Because of late data availability, sales counts were estimated in Alameda County.
Last month 37.3 percent of all homes resold in the Bay Area had been foreclosed on in the prior 12 months, down from 40.5 percent in May and the lowest since 36.0 percent in August 2008. The peak was 52.0 percent in February this year. By county, foreclosure resales ranged last month from 6.3 percent of all resales in Marin to 62.7 percent in Solano.
The typical monthly mortgage payment that Bay Area buyers committed themselves to paying was $1,585 last month, up from $1,443 the previous month, and down from $2,407 a year ago. Adjusted for inflation, current payments are 39.7 percent below typical payments in the spring of 1989, the peak of the prior real estate cycle. They are 55.4 percent below the current cycle's peak in July 2007.
Indicators of market distress continue to move in different directions. Foreclosure activity remains near record levels, while financing with adjustable-rate mortgages is near the all-time low but has recently edged higher. Financing with multiple mortgages is low, down payment sizes and flipping rates are stable, and non-owner occupied buying is above-average in some markets, MDA DataQuick reported.
| Sales Volume | Median Price | |||||
|---|---|---|---|---|---|---|
| All homes | Jun-08 | Jun-09 | %Chng | Jun-08 | Jun-09 | %Chng |
| Alameda | 1,441 | 1,753 | 21.7% | $455,000 | $335,000 | -26.40% |
| Contra Costa | 1,528 | 1,817 | 18.9% | $378,000 | $250,000 | -33.90% |
| Marin | 258 | 271 | 5.0% | $846,000 | $710,000 | -16.10% |
| Napa | 113 | 108 | -4.4% | $440,000 | $355,000 | -19.30% |
| Santa Clara | 1,626 | 2,090 | 28.5% | $612,000 | $445,000 | -27.30% |
| San Francisco | 571 | 561 | -1.8% | $726,750 | $635,000 | -12.60% |
| San Mateo | 565 | 622 | 10.1% | $690,000 | $565,500 | -18.0% |
| Solano | 511 | 851 | 66.5% | $300,000 | $185,000 | -38.30% |
| Sonoma | 565 | 571 | 1.1% | $389,500 | $300,000 | -23.00% |
| Bay Area | 7,178 | 8,644 | 20.4% | $485,000 | $352,000 | -27.40% |
Source: MDA DataQuick Information Systems, www.DQNews.com
Saturday, June 27, 2009
Interesting Housing Anecdotes
Several interesting stories I heard recently:
REO SFH in Tracy: the same kind of house was priced at $280K last year. Peak was $550K+. Now the listing price is $220K. A buyer offered $230K (5% over) but didn't get it. The whisper number is $250K (~15% over).
Another REO SFH in Tracy: 20 yr old, 1,500+ sq ft, 3 BR/2BA. The listing price is $120K, market value $180K, offered $140K (17% over), didn't get it either.
SFH in San Jose Berryessa area: 25 yr old, 1,500 sq ft, 3 BR/2.5 BA. The listing price is $410K (below market). Got 70 offers in 7 days! $480K (20% over) will likely get it.
SFH in West San Jose, Lynbrook High: 1,200 sq ft, 4BR/2BA, listing price in the high $700s. On major street with a bus stop right in front of the house. It went sales pending after one open house!
It seems a lot of investors from out of the state/country are buying distressed properties in CA. Heard there are a surge of applications to get TIN (temporary SSN) from foreign investors who pay cash for homes in the bay area lately.
REO SFH in Tracy: the same kind of house was priced at $280K last year. Peak was $550K+. Now the listing price is $220K. A buyer offered $230K (5% over) but didn't get it. The whisper number is $250K (~15% over).
Another REO SFH in Tracy: 20 yr old, 1,500+ sq ft, 3 BR/2BA. The listing price is $120K, market value $180K, offered $140K (17% over), didn't get it either.
SFH in San Jose Berryessa area: 25 yr old, 1,500 sq ft, 3 BR/2.5 BA. The listing price is $410K (below market). Got 70 offers in 7 days! $480K (20% over) will likely get it.
SFH in West San Jose, Lynbrook High: 1,200 sq ft, 4BR/2BA, listing price in the high $700s. On major street with a bus stop right in front of the house. It went sales pending after one open house!
It seems a lot of investors from out of the state/country are buying distressed properties in CA. Heard there are a surge of applications to get TIN (temporary SSN) from foreign investors who pay cash for homes in the bay area lately.
Saturday, May 30, 2009
Available New Home Purchase Tax Credit Funds Dwindle
In March the California State Legislature passed a law establishing a personal income tax credit for purchasers of a qualifying principal residence. The tax credit is capped at the lesser of $10,000 or 5 percent of the purchase price for the purchase of a principal residence that has never been occupied between March 1, 2009 and March 1, 2010.
Over the past two months homebuyers have reserved over $65 million in tax credits, with only $35 million in available credits remaining, according to the California Franchise Tax Board. It is important for buyers to be aware that the seller must file paperwork with the state within seven days of the sale for the buyer to qualify for the credit.
The credit provides in equal amounts ($3,333 for the $10,000 credit) over the three successive taxable years beginning with the year in which the purchase is made.
Qualifying residences must never have been occupied and must be eligible after purchase for the Homeowner's Property Tax Exemption. The taxpayer must live in the home as his principal residence for at least two years, or be subject to payback for any tax credits received.
Unlike the federal tax credit, the state has limited the total amount of credits that may be claimed to $100 million. Because of this provision buyers must make a tax credit reservation, and credits will be allocated on a first come first served basis.
The California Franchise Tax Board (FTB) is accepting applications (via form 3528-A) for allocation (reservations) of credit by fax only (916-845-9754). For more information about the credit reservations, applicable forms and the number of credits still available, please see this California Franchise Tax Board Web page.
President Signs Law to Limit Foreclosures
President Barack Obama last week signed into law S. 896, the Helping Families Save Their Homes Act, an NAR-supported bill that includes provisions to limit foreclosures and keep families in their homes. The bill seeks to help home owners by providing a safe harbor for mortgage servicers who make a good-faith effort to modify troubled loans, and it makes changes to increase the use of the Hope for Homeowners program, which encourages replacement of troubled loans with safe FHA-backed financing. The bill also strengthens oversight of FHA-approved lenders and it establishes a task force to investigate mortgage foreclosure fraud.
The new law loosens the Hope for Homeowners (H4H) program requirements to help homeowners refinance out of their troubled mortgages and into more affordable, fixed-rate FHA-insured loans. If refinance proceeds are insufficient to pay off existing liens, the existing lien holders must voluntarily agree to a short payoff, but a new inducement is an opportunity for them to share in the homeowner's equity. Other changes to the H4H program include monetary incentives for both the participating servicers of the existing loans and originators of the FHA refinance. Millionaire borrowers (with net worth over $1 million) are now excluded from the program.
Effective immediately, an REO lender or buyer who acquires title through a foreclosure sale must give at least a 90-day notice to terminate a bona fide tenant. The following shall be considered bona fide tenants:
• the mortgagor or the child, spouse, or parent of the mortgagor under the contract is not the tenant;
• the lease or tenancy was the result of an arms-length transaction; and
• the lease or tenancy requires the receipt of rent that is not substantially less than fair market rent for the property or the unit's rent is reduced or subsidized due to a federal, state, or local subsidy.
A 90-day notice to terminate is sufficient for a month-to-month tenant or if a new owner will occupy the property as a primary residence at the end of the 90 days. Otherwise, a tenant with a one year or other fixed-term lease with a remaining lease term exceeding 90 days can stay in the premises until the remaining lease term ends. This new 90-day notice requirement applies to foreclosures of a federally-related mortgage loan or residential real property, except for properties under rent control, rent-subsidized programs (such as Section 8), or other state laws that provide additional protections for tenants. This law expires on December 31, 2012.
Other provisions of the Helping Families Save Their Homes Act include a 4-year extension of the $250,000 FDIC deposit insurance to December 31, 2013, protection for loan servicers who establish qualified loss mitigation plans from liability for an alleged breach of duty to maximize mortgage values for their investors, $130 million for foreclosure prevention counseling and education, and $2.2 billion to strengthen homeless programs.
Over the past two months homebuyers have reserved over $65 million in tax credits, with only $35 million in available credits remaining, according to the California Franchise Tax Board. It is important for buyers to be aware that the seller must file paperwork with the state within seven days of the sale for the buyer to qualify for the credit.
The credit provides in equal amounts ($3,333 for the $10,000 credit) over the three successive taxable years beginning with the year in which the purchase is made.
Qualifying residences must never have been occupied and must be eligible after purchase for the Homeowner's Property Tax Exemption. The taxpayer must live in the home as his principal residence for at least two years, or be subject to payback for any tax credits received.
Unlike the federal tax credit, the state has limited the total amount of credits that may be claimed to $100 million. Because of this provision buyers must make a tax credit reservation, and credits will be allocated on a first come first served basis.
The California Franchise Tax Board (FTB) is accepting applications (via form 3528-A) for allocation (reservations) of credit by fax only (916-845-9754). For more information about the credit reservations, applicable forms and the number of credits still available, please see this California Franchise Tax Board Web page.
President Signs Law to Limit Foreclosures
President Barack Obama last week signed into law S. 896, the Helping Families Save Their Homes Act, an NAR-supported bill that includes provisions to limit foreclosures and keep families in their homes. The bill seeks to help home owners by providing a safe harbor for mortgage servicers who make a good-faith effort to modify troubled loans, and it makes changes to increase the use of the Hope for Homeowners program, which encourages replacement of troubled loans with safe FHA-backed financing. The bill also strengthens oversight of FHA-approved lenders and it establishes a task force to investigate mortgage foreclosure fraud.
The new law loosens the Hope for Homeowners (H4H) program requirements to help homeowners refinance out of their troubled mortgages and into more affordable, fixed-rate FHA-insured loans. If refinance proceeds are insufficient to pay off existing liens, the existing lien holders must voluntarily agree to a short payoff, but a new inducement is an opportunity for them to share in the homeowner's equity. Other changes to the H4H program include monetary incentives for both the participating servicers of the existing loans and originators of the FHA refinance. Millionaire borrowers (with net worth over $1 million) are now excluded from the program.
Effective immediately, an REO lender or buyer who acquires title through a foreclosure sale must give at least a 90-day notice to terminate a bona fide tenant. The following shall be considered bona fide tenants:
• the mortgagor or the child, spouse, or parent of the mortgagor under the contract is not the tenant;
• the lease or tenancy was the result of an arms-length transaction; and
• the lease or tenancy requires the receipt of rent that is not substantially less than fair market rent for the property or the unit's rent is reduced or subsidized due to a federal, state, or local subsidy.
A 90-day notice to terminate is sufficient for a month-to-month tenant or if a new owner will occupy the property as a primary residence at the end of the 90 days. Otherwise, a tenant with a one year or other fixed-term lease with a remaining lease term exceeding 90 days can stay in the premises until the remaining lease term ends. This new 90-day notice requirement applies to foreclosures of a federally-related mortgage loan or residential real property, except for properties under rent control, rent-subsidized programs (such as Section 8), or other state laws that provide additional protections for tenants. This law expires on December 31, 2012.
Other provisions of the Helping Families Save Their Homes Act include a 4-year extension of the $250,000 FDIC deposit insurance to December 31, 2013, protection for loan servicers who establish qualified loss mitigation plans from liability for an alleged breach of duty to maximize mortgage values for their investors, $130 million for foreclosure prevention counseling and education, and $2.2 billion to strengthen homeless programs.
Saturday, May 9, 2009
Market Update in May
In response to my May 6th post below:
http://drhowealth.blogspot.com/2009/05/for-hombuyers.html
No wonder since the last 30 days we are seeing the foreclosed properties (e.g. REO= Real estate owned by bank) in Silicon Valley and the starter properties have received multiple and multiple offers. I have witnessed the record of 75 offers in Milpitas! I believe the bottom of the Silicon Valley housing market has been well supported and we might see a momentous increase in the property values soon.
http://drhowealth.blogspot.com/2009/05/for-hombuyers.html
No wonder since the last 30 days we are seeing the foreclosed properties (e.g. REO= Real estate owned by bank) in Silicon Valley and the starter properties have received multiple and multiple offers. I have witnessed the record of 75 offers in Milpitas! I believe the bottom of the Silicon Valley housing market has been well supported and we might see a momentous increase in the property values soon.
Wednesday, May 6, 2009
$$ for Homebuyers
Final Score: $8,000 for Homebuyers
First-time purchasers get a tax credit windfall if they buy before December.
Les Christie, CNNMoney.com staff writer
There's a nice windfall for some homebuyers in the economic stimulus bill. First-time buyers can claim a credit worth $8,000 - or 10% of the home's value, whichever is less - on their 2008 or 2009 taxes.
A big plus is that the credit is refundable, meaning tax filers see a refund of the full $8,000 even if their total tax bill - the amount of withholding they paid during the year plus anything extra they had to pony up when they filed their returns - was less than that amount. But there has been a lot of confusion over this provision. Adam Billings of Knoxville, Tenn. wrote to CNNMoney.com asking:
“I will qualify as a first-time home buyer, and I am currently set to get a small tax refund for 2008. Does that mean if I purchased now that I would get an extra $8,000 added on top of my current refund?”
The short answer? Yes, Billings would get back the $8,000 plus what he'd overpaid. The long answer? It depends. Here are three scenarios:
Scenario 1: Your final tax liability is normally $6,000. You've had taxes withheld from every paycheck and at the end of the year you've paid Uncle Sam $6,000. Since you've already paid him all you owe, you get the entire $8,000 tax credit as a refund check.
Scenario 2: Your final tax liability is $6,000, but you've overpaid by $1,000 through your payroll withholding. Normally you would get a $1,000 refund check. In this scenario, you get $9,000, the $8,000 credit plus the $1,000 you overpaid.
Scenario 3: Your final tax liability is $6,000, but you've underpaid through your payroll withholding by $1,000. Normally, you would have to write the IRS a $1,000 check. This time, the first $1,000 of the tax credit pays your bill, and you get the remaining $7,000 as a refund.
To qualify for the credit, the purchase must be made between Jan. 1, 2009 and Nov. 30, 2009. Buyers may not have owned a home for the past three years to qualify as “first time” buyer. They must also live in the house for at least three years, or they will be obligated to pay back the credit.
Additionally, there are income restrictions: To qualify, buyers must make less than $75,000 for singles or $150,000 for couples. (Higher-income buyers may receive a partial credit.)
Applying for the credit will be easy - or at least as easy as doing your income taxes. Just claim it on your return. No other forms or papers have to be filed. Taxpayers who have already completed their returns can file amended returns for 2008 to claim the credit.
Lukewarm reception
The housing industry is somewhat pleased with the result because the stimulus plan improves on the current $7,500 tax credit, which was passed in July and was more of a low-interest loan than an actual credit. But the industry was also disappointed that Congress did not go even further and adopt the Senate's proposal of a $15,000 non-refundable credit for all homebuyers.
“[The Senate version] would have done a lot more to turn around the housing market,” said Bernard Markstein, an economist and director of forecasting for the National Association of Homebuilders (NAHB). “We have a lot of reports of people who would be coming off the fence because of it.”
Even so, the $8,000 credit will bring an additional 300,000 new homebuyers into the market, according to estimates by Lawrence Yun, chief economist for the National Association of Realtors.
The credit could also create a domino effect, he said, because each first-time homebuyer sale will lead to two more trade-up transactions down the line. “I think there are many homeowners who would be trading-up but they have had no buyers for their own homes,” Yun said.
Who won't benefit, according to Mark Goldman, a real estate lecturer at San Diego State University, are those first-time homebuyers struggling to come up with down payments. The credit does not help get them over that hurdle - they still have to close the sale before claiming the bonus.
One state, Missouri, is trying to get around that problem by creating a short-term loan on the tax credit of up to $6,750. The state would loan borrowers the money so they could use it at closing as part of the down payment. Then, when the buyers receive their tax credit from the IRS, they pay back the state. Other states may follow with similar programs, according to NAHB's Dietz.
Many may look at the tax credit as a discount on the home price, according to Yun. A $100,000 purchase effectively becomes a $92,000 one. That can reassure buyers apprehensive about purchasing and then watching prices continue falling, he added.
And it provides a nice nest egg for the often-difficult early years of homeownership, when unexpected repairs and expenses often crop up. Recipients could also use the money to buy new stuff for their home - a lawnmower, a rug, a sofa - and, in that way, help stimulate the economy.
Reprint courtesy of CNNMoney.com
First-time purchasers get a tax credit windfall if they buy before December.
Les Christie, CNNMoney.com staff writer
There's a nice windfall for some homebuyers in the economic stimulus bill. First-time buyers can claim a credit worth $8,000 - or 10% of the home's value, whichever is less - on their 2008 or 2009 taxes.
A big plus is that the credit is refundable, meaning tax filers see a refund of the full $8,000 even if their total tax bill - the amount of withholding they paid during the year plus anything extra they had to pony up when they filed their returns - was less than that amount. But there has been a lot of confusion over this provision. Adam Billings of Knoxville, Tenn. wrote to CNNMoney.com asking:
“I will qualify as a first-time home buyer, and I am currently set to get a small tax refund for 2008. Does that mean if I purchased now that I would get an extra $8,000 added on top of my current refund?”
The short answer? Yes, Billings would get back the $8,000 plus what he'd overpaid. The long answer? It depends. Here are three scenarios:
Scenario 1: Your final tax liability is normally $6,000. You've had taxes withheld from every paycheck and at the end of the year you've paid Uncle Sam $6,000. Since you've already paid him all you owe, you get the entire $8,000 tax credit as a refund check.
Scenario 2: Your final tax liability is $6,000, but you've overpaid by $1,000 through your payroll withholding. Normally you would get a $1,000 refund check. In this scenario, you get $9,000, the $8,000 credit plus the $1,000 you overpaid.
Scenario 3: Your final tax liability is $6,000, but you've underpaid through your payroll withholding by $1,000. Normally, you would have to write the IRS a $1,000 check. This time, the first $1,000 of the tax credit pays your bill, and you get the remaining $7,000 as a refund.
To qualify for the credit, the purchase must be made between Jan. 1, 2009 and Nov. 30, 2009. Buyers may not have owned a home for the past three years to qualify as “first time” buyer. They must also live in the house for at least three years, or they will be obligated to pay back the credit.
Additionally, there are income restrictions: To qualify, buyers must make less than $75,000 for singles or $150,000 for couples. (Higher-income buyers may receive a partial credit.)
Applying for the credit will be easy - or at least as easy as doing your income taxes. Just claim it on your return. No other forms or papers have to be filed. Taxpayers who have already completed their returns can file amended returns for 2008 to claim the credit.
Lukewarm reception
The housing industry is somewhat pleased with the result because the stimulus plan improves on the current $7,500 tax credit, which was passed in July and was more of a low-interest loan than an actual credit. But the industry was also disappointed that Congress did not go even further and adopt the Senate's proposal of a $15,000 non-refundable credit for all homebuyers.
“[The Senate version] would have done a lot more to turn around the housing market,” said Bernard Markstein, an economist and director of forecasting for the National Association of Homebuilders (NAHB). “We have a lot of reports of people who would be coming off the fence because of it.”
Even so, the $8,000 credit will bring an additional 300,000 new homebuyers into the market, according to estimates by Lawrence Yun, chief economist for the National Association of Realtors.
The credit could also create a domino effect, he said, because each first-time homebuyer sale will lead to two more trade-up transactions down the line. “I think there are many homeowners who would be trading-up but they have had no buyers for their own homes,” Yun said.
Who won't benefit, according to Mark Goldman, a real estate lecturer at San Diego State University, are those first-time homebuyers struggling to come up with down payments. The credit does not help get them over that hurdle - they still have to close the sale before claiming the bonus.
One state, Missouri, is trying to get around that problem by creating a short-term loan on the tax credit of up to $6,750. The state would loan borrowers the money so they could use it at closing as part of the down payment. Then, when the buyers receive their tax credit from the IRS, they pay back the state. Other states may follow with similar programs, according to NAHB's Dietz.
Many may look at the tax credit as a discount on the home price, according to Yun. A $100,000 purchase effectively becomes a $92,000 one. That can reassure buyers apprehensive about purchasing and then watching prices continue falling, he added.
And it provides a nice nest egg for the often-difficult early years of homeownership, when unexpected repairs and expenses often crop up. Recipients could also use the money to buy new stuff for their home - a lawnmower, a rug, a sofa - and, in that way, help stimulate the economy.
Reprint courtesy of CNNMoney.com
Saturday, January 17, 2009
San Jose Local Trends
Click "Price" or "Inventory" tab at lower righthand corner of the chart to view stats for Willow Glen and Cambrian.
San Jose Real Estate - Trulia |
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