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Will the April 30th expiration of the $8,000 homebuyer tax credit cause your property value to slump again?

admin — Thu, 18 Feb 2010 17:08:40 +0000

Will the April 30th expiration of the $8,000 homebuyer tax credit cause your property value to slump again? Many of my buyers are scrambling to buy before the tax credit ends. Even my own brother is racing towards this goal. So it is definitely spurring people to buy. To qualify, a buyer must be in escrow by April 30th. What will happen to your property value AFTER April 30th? Some say that the tax credit will be extended for a second time. Others say the economy has sufficiently recovered and it won’t. Even more say that the market will slump again after it is gone. Call Erik to chat about the timing of your sale, and the effects of the tax credit on your value.

California’s Resale Housing Market in December

admin — Tue, 02 Feb 2010 21:46:41 +0000

The California Association of Realtors (CAR) recently released their December 2009 report for existing home sales and prices in California. Statewide, sales of existing single-family homes rose by +1.7% (compared with December 2008) to 558,320 units (seasonally adjusted, annualized rate) while the median price increased by +8.4%. The was the second consecutive year-over-year price increase (in November prices rose by +4.7% for the first time since August 2007) and was the largest year-over price increase in three years. On a month-over basis, December marked the tenth month in a row to see an increase in median price (+0.8%). In Los Angeles County, unit sales during December rose by +4.3% over the year. The median price increased by +4.9% to $353,560. In Orange County, unit sales jumped by +17.9% during December, while the median price advanced by +12.1% to $496,070. Compared with November the median price in both counties lost ground – retreating in Los Angeles County by -1.7% and by -0.6% in Orange County. In the Riverside-San Bernardino area, unit sales plummeted by -19.3% compared with December 2008 (and that followed a drop of -13.5% in November). However, December sales jumped by +13.6% over the month after falling by -17.6% in the previous month. The median price also fell in December, declining by -5.1% to $181,130. Unit sales in San Diego County during December increased by +6.9%, while the median price rose by +10.3% to $382,230. On a month-over basis, sales rose by a robust +22.0% after falling by -17.4% in November. Ventura County saw an improvement in unit sales (+8.2%) in December and a median price that rose by +15.4% to $427,890. In the San Francisco Bay area, unit sales rose by a strong +28.7% over the year (and by +6.6% for the month). The median price surged by +15.1% to $536,070. Home sales in December were strong, but the exceptionally large year-over increases seen at the beginning of the year diminished as 2009 drew to a close. December’s sturdy showing was attributable in part to near-historic highs in home affordability and low interest rates (4.93% 30 year fixed). The CAR reported that the unsold inventory index fell to 3.8 months in December, compared with 5.6 months at this time last year.

Create Life Changing Wealth-Learn to build your own million dollar real estate portfolio

admin — Thu, 15 Oct 2009 18:53:05 +0000

Lately I’ve been asked if now is a good time to invest, and my answer is always the same – YES! Now you might be saying to yourself that this sounds like optimistic broker speak, but it’s not. The reality is that we’re in the midst of a perfect storm and there are 3 great reasons that you should be investing in income property right now.

Cheap Debt – interest rates are still at historic lows and you can get a 30 year fixed, non-owner occupied investment loan on a 3-4 unit property in the 6.0% range. That is fantastically cheap money.
Low Prices – prices in most areas have fallen back to 2001 and below levels making this a great time to buy. You know the old adage, ‘buy low…sell high’.
Inflation – with our federal deficit growing and over $1.2 trillion of new money recently printed, most experts agree we’re about to go into a period of significant inflation. And while this isn’t great as a consumer, as a property owner you like it for two reasons: first, you’re repaying your debt with deflated dollars and second, your rental income will increase meaning your passive income will increase as well.

For many new investors the largest impediment to success is fear and an inability to get financing. The first obstacle can be overcome through education and by working with a knowledgeable real estate professional. That is where the information on this site comes in. The second can be addressed by speaking with your mortgage broker and making sure you qualify for today’s cheap debt.

So act now. Today’s low prices and great financing, coupled with tomorrow’s inflation, will be the foundation of your future wealth.

FHA Changes Rules On Condo Financing

admin — Tue, 08 Sep 2009 23:30:04 +0000

In a move designed to shift risk from the US Department of Housing and Urban Development (HUD) to lenders, the Federal Housing Administration (FHA) is changing the way condominiums are financed. FHA has issued new guidelines for lenders underwriting loans secured by any unit located in a condominium project. Effective October 1st, lenders will be required to review project documentation and determine if the project meets eligibility requirements. (See HUD Mortgage Letter 2009-19 for more details.) Previously, HUD maintained a list of approved condo projects, which streamlined the underwriting process for lenders. However, the struggling condo market led HUD to suspend the use of an approved project list, thereby forcing lenders to perform due diligence on each condo project that is presented for approval. Preliminary response from lenders has been guarded. The mortgage industry has transformed into a risk-averse operation, with lenders abandoning potentially hazardous loans in favor of safe, high-performing products that can be sold to Fannie Mae, Freddie Mac, or FHA. Erroneously approving a condo project can expose a lender to significant financial penalties. As a result, lenders are opting to manage this risk by electing not to accept FHA loan applications for condominiums. As the October 1st deadline approaches, expect to see a flurry of announcements by lenders as to their position on this matter. FHA financing has long been the loan of choice for many first-time home buyers due to its relaxed underwriting guidelines (compared to those of Fannie Mae or Freddie Mac, the two main sources for conventional financing). Since much of the current home sale activity is attributed to the first-time home buyer, this announcement by HUD comes at a precarious time as the housing sector struggles to recover. However, HUD must take steps to mitigate their growing losses, and curbing the risks associated with condo financing is a start.

5 Things to Know About the First-Time Home Buyer Tax Credit

admin — Wed, 02 Sep 2009 22:52:59 +0000

The $787 billion stimulus bill that President Barack Obama signed into law includes a measure designed to help revive the real estate market. Here are five things you should know about the recently enacted $8,000 first-time home buyer tax credit.

1. $8,000 for new buyers: This tax credit is equivalent to 10 percent of the purchase price of the home with a maximum credit of $8,000. This credit applies only to first time home buyers and principal residences. Unlike the $7,500 home buyer tax credit from 2008, this one does not have to be repaid.

2. Definition of a first time buyer: For the purpose of this legislation, a “first-time home buyer” is someone who hasn’t owned a principal residence for three years before buying a house. (The date of purchase is considered the day that the title is transferred.) That means if you’ve owned a vacation home, but not a principal residence, within the last 3 years, you would still qualify for the credit.

3. 2009 buyers only: Only those who purchase on or after January 1,2009 and before December 1, 2009 are eligible for this credit. Anyone who bought a home in 2008 will not be able to take advantage of it.

4. Income limits: The tax credit is subject to income limitations. Single buyers need a modified adjusted gross income of $75,000 or less to qualify for the full credit. For married couples, it is $150,000 or less. Those earning more than these thresholds may be eligible for reduced credits.

5. Recapture: Buyers have to own the home for at least three years in order to capitalize on the credit. If they sell the home before then, they will have to return the credit to the government. (Exceptions will be made in certain cases, such as death or divorce.)