C.A.R. - February 13, 2009
Late this evening, the U.S. Senate passed the American Recovery and Reinvestment Act of 2009 by a 60 to 38 vote. Earlier today, the stimulus package passed the U.S. House of Representatives in a 246 to 183 vote. Today’s votes followed several days of negotiations by the House, Senate, and White House, with the final tab for the stimulus bill coming in at $787.2 billion.
On the housing front, the good news is that the legislation resets the conforming loan limit cap at $729,750, up from $625,500. Numerous counties in California experienced a marked decrease in their conforming loan and FHA limits on Jan. 1, and the stimulus bill reinstates 2008 loan limits through Dec. 31, 2009.
The bill also increases the first-time home buyer credit from $7,500 to $8,000, and removes the requirement that the credit be paid back if the buyer stays in the home for at least three years. It also extends the expiration date for the credit from July 1 to Dec. 1, 2009. Homebuyers must have purchased a home after Jan. 1, 2009, and before Dec. 1, 2009, to be eligible for the $8,000 credit.
C.A.R. and NAR have long advocated for higher conforming loan limits. The conforming loan limit provisions and other housing elements in the stimulus package are a step in the right direction for our industry and all Californians.
The stimulus package also contains $308.3 billion in appropriations spending, including $120 billion on infrastructure and science and more than $30 billion on energy-related infrastructure projects. It also allocated an additional $267 billion for direct spending, including increased unemployment benefits and food stamps; and provides $212 billion in tax breaks for individuals and businesses.
Now that the stimulus package is approved and is on its way to President Obama for signature, it is our hope that Congress will turn its attention toward helping homeowners remain in their homes and will take immediate steps directed specifically at stemming the ongoing foreclosure crisis.
Advice for Buyers & Sellers
Buyers: Our local real estate market continues to be active, particularly in the division of distressed sales. Properties attempting to sell as short-sales during summer and fall of 2008 have now been foreclosed on and the banks are advertising them for sale with large discounts. It has even become common for the banks to pay the buyer’s closing costs, sometimes crediting buyers over $10,000. The combination of discounted prices and low rates continue to bring additional buyers back into the market and create multiple offers in some situations when the properties are generously underpriced. I suggest that all buyers contact a lender and have their pre-approval letter in hand, so when a great opportunity presents itself you look the most prepared and qualified to potential sellers. You can view all homes for sale, including foreclosures, online at SanDiegobythesea.com If you know anyone who is thinking about buying, please let me know how I may be of assistance.
Sellers: The properties in your neighborhood that are commonly in the most trouble are those that were purchased over the last 4 years with 0-10% down, regardless of the loan type. These are the properties that are your competition, or soon will be. If they are advertised as short-sales, don’t be surprised if their asking price seems too low, as their intention is to get multiple offers. If an offer is accepted, the bank will have picked the sales price that comes closest to covering the loan amount. The larger concern for sellers is the presence of foreclosed homes for sale in the area. These bank owned homes will sell within 30-90 days, most are likely to sell under market value. Visit SanDiegobythesea.com to see how we can sell your property. If you know anyone who is thinking about selling, please let me know how I may be of assistance.
Sellers: The properties in your neighborhood that are commonly in the most trouble are those that were purchased over the last 4 years with 0-10% down, regardless of the loan type. These are the properties that are your competition, or soon will be. If they are advertised as short-sales, don’t be surprised if their asking price seems too low, as their intention is to get multiple offers. If an offer is accepted, the bank will have picked the sales price that comes closest to covering the loan amount. The larger concern for sellers is the presence of foreclosed homes for sale in the area. These bank owned homes will sell within 30-90 days, most are likely to sell under market value. Visit SanDiegobythesea.com to see how we can sell your property. If you know anyone who is thinking about selling, please let me know how I may be of assistance.
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