What Now?
It’s an important question, since it appears the homebuyers tax credits won’t be extended. But it’s a question not to be feared. We think it’s time the housing market stood on its own feet anyway. After all, we can’t gauge the health of a market if it’s still supported with taxpayer stanchions.
But that’s okay; we think the housing and mortgage markets are sufficiently healthy to stand alone. Pessimism is the intellectual position, but the fact is the economy is getting better: Despite worries that American consumers might hunker down for years — spooked by debt, lost savings, and unemployment — austerity has given way to shadows of a new shopping spree: households are replacing cars, upgrading home furnishings, and amassing gadgets. What’s more, wealth – at least wealth measured by equity holdings – is booming.
On the mortgage side, private investors are returning. A California firm recently completed the first private-sector sale of a security backed by mortgages in nearly two years, potentially reopening a market slammed shut by the housing crisis. The $238-million deal was of the highest quality, to be sure, with borrowers making an average down payment of 45 percent and mortgage payments comprising less than 30 percent of income. But as the economy continues to improve and investors become less risk adverse, less restrictive mortgages will be securitized.
Bottom line: we see a growing economy, improving employment, stable home prices, and less restrictive (though higher rate) mortgages in our future. In other words, we see a market for buying and refinancing today.
It’s Working and Working Well!!!
You might ask, what is working and working well. I am speaking about the $8000 Home Buying Credit. A recent home buyer brought up the $8000 credit and told me that was the motivating factor for him and his wife purchasing a home. The termination date creates urgency and action. Low prices are motivating but not the cause of action. Many think they can time the market. Good Luck to them. People in the business think the lowest interest rates in 40 years should be creating urgency. It certainly makes people think but low rates is all many of these young first time buyers know. I purchased a home in 1982 at 14% interest and that was considered good. Today’s 5% and below interest rates are like the “After Christmas Sale”. But still does not create the urgency since many believe it will last forever.
The $8000 federal tax credit was extended and now sounds like it will really terminate April 30, 2010. Now that creates urgency! OK; the credit created a home sale and that helps stabilize pricing. Let’s not forget all the mouths a home sale feeds: the realtor, mortgage broker, title people, escrow company, termite inspector, home inspector, city tax coffers, and more. Now let me show you all the mouths my client fed by spending his credit on: landscaping, painting, double pane windows, window coverings, furniture and more. Others may remodel a kitchen or bath, carpet, appliances, roof, etc. My client purchased the home from a flipper who must have put $50,000 into the home. Add that up, and the $8000 quickly turns into over $100,000 of added income to local people. That feeds lots of mouths. Being employed in Real Estate and related fields, as Americans and Smart business people we should be ecstatic. I know I am. I am a believer. Read more
It is starting to trickle down?
A question that comes up when talking about today’s housing market is if the recent economic stimulus packages and federal bailouts that we are all paying for will actually help the average homeowner. I wish I could tell you that I understand how it all is suppose to work. You wonder how pumping billions of dollars of taxpayer dollars into bleeding financial institutions will actually trickle down and help average hard working families who are struggling to keep ahead of their daily expenses and keep a roof over their family’s heads. I can’t tell you how it is all suppose to work but I can tell you that I can now see it on my newest mortgage statement. Read more
Positives of This Economy!!!
JEvery Negative Has a PositiveJ
Positives of This Economy
1. Bay Area Housing Affordability has gone from 16% to 38%
2. Debt of Americans is Decreasing.
3. A Large Increase in People Volunteering.
4. A Large increase in Military Enrollment.
5. First Time Home Buyers can get an $8000 Tax Credit.
6. Buyers of California New Homes can get a $10,000 State Tax Credit.
7. People are able to modify or refinance their loans to an affordable payment.
8. Businesses have the opportunity to clean up their books and start fresh.
9. Great Opportunity to Purchase a new car or any other major purchase.
10. Tax on Debt Forgiveness is waived.
And one of my favorites; you can Buy any Foot Long Sub for only $5.00
Please add to this list of Positives
www.leesellsmore.com
Housing Stimulus – An Open Letter to the Politicians
To Congress Woman Jackie Spier, Senator Diane Feinstein, and Senator Boxer
I am a local realtor specializing in San Mateo and San Francisco Counties. I do not think the $15,000 Home Buyer Tax Credit in the Economic Stimulus Package is making best use of Tax Payers money. Read more
A look back to January 2008, A look forward to January 2009
Just a thought to ponder, and maybe a subject everyone could comment on. In January 2008 Real Estate was the blame for our poor economy, flash forward to January 2009, might stable real estate values be the key to a recovering economy? It seems the Goverment is thinking that way. How about you?
Is the Bottom In Sight?
The window is open but could be closing soon. The window I am speaking about is “The Window of Opportunity”. In the Bay Area we might be seeing the light at the end of the tunnel. The bottom might be in sight. Why am I saying this? It is economics 101; Supply and Demand. On the Supply side in the Bay Area we are seeing the Supply stabilize or even decrease in certain areas. Read more
Housing Stimulus Package! I don’t think so!!!
Credit/Loan Does it Stimulate the Housing Market? I don’t think so!!!
AS promised in my last blog I have continued my thoughts on the most recent Housing Stimulus Package. I will continue in next week’s blog.
Part of the recent Housing Stimulus package is a much publicized First Time Home Buyer Credit! It is not a credit. It is 15 year Interest FREE loan. Gotta take anything For Free. This applies to any home purchased between April 8, 2008 and July 1, 2009. How and why they picked those dates; Read more
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