Today, Gov. Schwarzenegger signed Assembly Bill 183, the Homebuyer Tax Credit legislation, into law. AB 183 will provide $200 million for home buyer tax credits, allocating $100 million for qualified first-time home buyers of existing homes and $100 million for purchasers of new, or previously unoccupied, homes. The eligible taxpayer who purchases a qualified personal residence on and after May 1, 2010, and on or before Dec. 31, 2010, or who purchases a qualified principal residence on and after Dec. 31, 2010, and before Aug. 1, 2011, pursuant to an enforceable contract executed on or before Dec. 31, 2010, will be able to take the allowed tax credit. The credit is equal to the lesser of 5 percent of the purchase price or $10,000, in equal installments over three consecutive years. Under AB 183, purchasers will be required to live in the home for at least two years or forfeit the credit (i.e., repay it to the state).

Call us for more information!

If you are thinking of buying this spring, you may be looking around and wondering….what exactly are you going to buy? There are very few homes for sale right now. Sellers who have been holding off should reconsider — this is a great time to sell. With inventory low and buyers looking to purchase, you can be well-positioned if you price your home right and get it on the market in time to take advantage of the tax credits. Think about it!

We have seen this in our practice, and it’s being noticed on a large scale — homeowners all around the country, and largely in the Bay Area, are walking away from mortgages that far exceed the value of their homes. Read more here in the Chronicle.

In another effort to stem the tide of foreclosures, President Obama is instituting a plan whereby homeowners can actually receive a bit of cash for completing a short sale. Read the details here in the New York Times.

February 2010 Housing Statistics posted!

When pondering how we got to where we are in the real estate market, it is hard not to figure that stupidity and outright fraud play roles. After all, people purchased homes with “stated income” loans, meaning that they stated to the lender that they had a certain level of income that was high enough to cover huge mortgage payments. We know that people sometimes stated income far in excess of their actual income in order to purchase a home that they simply could not afford. Those same people now face foreclosure, because they were unable to refinance the huge loan with substantial payments into something with more reasonable payments, because the property value fell. The effect of these foreclosures compounds the market’s problems, further depressing prices.

Today’s news includes a story from Bakersfield where a real estate agent and her father are being charged with fraud related to the father’s purchase of five “principal residences” in only six weeks. Read the story on the Bakersfield news site. I expect that going forward, we will continue to see stories like this one. What bothers me so much is that those of us in the real estate business who are honest, who will not help a client purchase a home they cannot afford, who will not sell a home to someone who cannot afford it or who has to engage in fraud in order to finance it, are suffering from the poor market conditions as much as those who helped to create and exacerbate it.

Statistics compiled by the Construction Industry Research Board (CIRB) show homebuilders pulled permits for 2,979 total housing units in January, a 49 percent increase compared with January 2008 but an 18 percent decline compared with December 2009. Permits for single-family homes totaled 1,908, a 50 percent increase compared with the same period a year ago but down 28 percent compared with the previous month. Multifamily permits totaled 1,071, up 45 percent compared with a year ago and 11 percent compared with December.

Ben Bartolotto, research director for CIRB, noted that the monthly decreases from December to January were typical as January is usually one of the weakest months for housing starts. He also noted any enthusiasm for the year-over-year increases seen in January should be tempered with the fact that the numbers for January 2009 posted the lowest annual rate on record.

CIRB is forecasting a modest recovery for 2010, with permits being pulled for 52,000 total units, up slightly from the record-low 36,289 permits pulled in 2009.

From March 4, 2010 C.A.R. Newsline
Reprinted with permission from the California Association of Realtors

Every year at about this time, the real estate market hits what we call the “Spring buying season.” This is the prime time of the year for sellers to snag ready, willing and able buyers looking to be settled in their new home before the new school year. We typically see an uptick in listing inventory and receive more calls from buyers looking to get qualified for a loan and begin their shopping.

From media reports, you would think this year there will be no buying season, but that’s not quite right. There is indeed a buying season, and it is upon us, though it might look a little different than seasons past. On the upside for sellers are the tax credits. Buyers entering into contracts before April 30 may qualify for one of the tax credits, so the buying season is actually pushed to a little earlier than usual. Buyers planning to take advantage of a credit cannot wait until May or June to buy, as they sometimes would.

The season is also different because of the types of listings available. Many banks are holding off on marketing their foreclosures, largely because they are concerned that if they flood the market with bank-owned homes, prices will sink further. So, they are slowly releasing these homes into the market in a controlled fashion. Banks are also slowing their foreclosure process because of regulatory changes. That means that homeowners facing foreclosure have a longer time to try to sell in a short sale. As a result, the listings currently on the market are a different mix than they were only a few months ago. Fremont, for instance, is not overwhelmed with foreclosures at all. Of the 319 homes currently available in Fremont, 85 are short sales, 33 REOs (bank-owned foreclosures) and the vast majority, 202 homes, are standard sales. Pleasanton is similar — 149 homes available, 31 short sales, 13 REOs and 105 standard sales.

What does this mean to sellers? It means that if you plan to sell, get your home on the market in time to sell by April 30 (be under contract, not close, by that date). It also means that your price is not going to be set so much by the foreclosed homes, or even the short sales, but rather to compete with the standard sales. This is good! Your price will not take the hit you might be dreading from the foreclosed home down the street.

What does this mean for buyers? It’s a great time to go home shopping. Get pre-approved for your loan, and set out with your agent to find a great place to call home. You do not need to get involved with a short sale if you want to avoid them; there are plenty of homes available that do not come with that snag. There are some bank-owned homes to consider, but there too they can be avoided if you prefer. There are literally hundreds of homes available that have no foreclosure issues. So get approved and get under contract by April 30 to take advantage of one of the tax credits.

Spring buying season changes from year to year, and this year it may be more strikingly different because of all the changes in the market. But it is still happening. Don’t miss out on your opportunity to be part of it if this is your year to buy or sell.

I stumbled across this great article on staging your home for sale. http://realtytimes.com/rtpages/20100301_staging.htm

What I like about this article is its focus on “less is more.” I cringe when I walk into a home for sale and there is so much furniture in a room that I can’t move around. Or so many trinkets that I don’t even notice that the fireplace mantle is a gorgeous carved wood, or that there is a neat little alcove off the living room. When it’s time to sell, be sure to take a fresh look at your home and see how buyers will see it. Make sure to ask your broker for his opinion, too. He’s seen thousands of homes, and he knows (or should know) what works!