Real Estate Information Archive

GREAT report! In this month's issue enjoy tips & info on the following key points:

• 1st-Time Buyer Tax Credit Expired on April 30th - What will this mean for Sellers and Buyers?
• What the #'s are telling us about the current market: 1st-time Buyers made up 42% of all purchases in February, and Investors made up 19%.
• 3 Key Tips for Selling Your Home in this current housing market

The average US citizen looks at NAR (National Association of Realtors) as nothing more than another lobbying group that spends its' days and nights telling buyers that every day is the "right time to buy."

What people (this includes Realtors themselves) don't realize is that they are doing a CRITICAL work for the country in getting legistation passed that benefits us all. So what did they do this time? Nothing besides creating an opportunity for 1st-time home buyers to get $8000.00 of FREE MONEY from the government!

Yes, FREE, so long as you hold the home for at least 3 years. That is pretty easy since I am counseling ALL of my clients to buy for the long-term.

Many thanks to one of my lending partners, Blake Bench of Countrywide Home Loans, for this timely breakdown of how the latest ("latest implying one of MANY bailouts...) multi-GAZILLION dollar (gazillion with a "g") bailout legislation.

This sign is posted on the doors of Congress....

The information is not only timely, but downright critical to not only those of us either working in the industry, or trying to buy or sell real estate right, but the greater populiation at large. Until we get the real estate markets more healthy, there will be major financial pain worldwide.

The only thing most of us hear about the bailout package is that GM and others want taxpayers to pick up the tab on a few million transmissions.....good to know, but not relevant to real estate. Here it is:

• Tax Credit: The tax credit for first time home buyers has gone up from $7,500 to $8,000. I also understand that this new amount doesn't have to be repaid. I have been helping buyers see that they could use this money to repay a gift from a relative. Maybe then they can come up with a down payment. (I wish that they had passed the $15,000 credit for any homebuyer but sometimes when you wish upon a star your dreams don't come true.) I have to add the disclaimer for all buyers to talk to their accountant or tax advisor about this since I am not licensed to give that type of advice.  Here is a breakdown of the tax credit:

Still not making sense? Here is a step-by-step explanation: 2009 Tax Credit Explained

• Help for struggling home owners: Many borrowers from the last few years put nothing down or very little down toward the purchase of their home. With home values now lower many are upside down and can't refinance. New legislation may allow them to refinance with LTV's up to 105% of the homes current value if they have stayed current on their payments. I am going to call all of my database and see if I can help them lower their payments.
• Modifications: Billions of dollars are set aside to help people modify their loans without refinancing. They do not have to have missed payments to qualify for this.
• Keeping Interest Rates Low: Bear in mind that current interest rates are "artificial" in nature and WILL NOT stay this low for ever. (This subject merits its' own discussion) These "artificial" rates are part of the government's plan to "prop up" the ailing economy. Treasury and Federal Reserve will continue to purchase Fannie Mae and Freddie Mac mortgage-backed securities to ensure stability and liquidity. The Treasury will also provide up to $200 billion in capital to ensure that Fannie Mae and Freddie Mac can continue to stabilize markets and hold mortgage rates down

Departing from Blake's starter course on the bailout, let me add the following advice: Make sure you completely understand the rules, regulations and consequences (good and bad) of things like tax credits and local "grants" for home buyers.

In the meantime, chime in with any key information or ideas you have on this bailout business!

WOW. One morning you wake up and realize that your alleged home equity is gone, you are faced with losing your cars, boat & TV that you bought on a HELOC, and your former realtor or mortgage broker is now serving coffee at Denny's.....ouch.

Every once in a while you see or hear something that absolutely knocks you off your chair. It could be an advertisement, a song, a movie or something in a book. This video clip was that moment for me. Maybe it's because I'm a real estate "geek", but I doubt it.

I'm sure I'll take heat from someone for having Hitler mentioned in my blog, but it may be completely worth it for the joy of sharing this stuff with the majority.

If you are living, breathing US citizen, and especially if you are a homeowner (or formerly a homeowner....) you will have to smirk when you watch this. It even takes jabs at the National Assocication of Realtors as well as Realtors in General. That is what makes it even more hilarious to me.

This is the most incredible sattire of the current housing market experience ever created!

Enjoy as Hitler laments his personal downfall after:

• taking out a "liar loan" to purchase his home
• buying a flat-screen TV & luxury car with this home equity line
• and now faces the reality of losing his "Vintage Camaro SS."
• And his former Realtor now considers taking a job as a dog groomer.....

WOW.

Am I the only person who has been asking this: "What in the world does this $700 billion bailout MEAN?!?!?"

I have been patiently waiting for some kind of summary that actually makes sense (and that a lowly Realtor can understand) on this $700 Billion bailout deal. The National Association of Realtors released a fairly concise (2 pages) summary this morning which can be found at the link below:

(click here) Summary of Rescue Bill 

I am not even going to TRY to explain it all in this post, but I would be more than happy to discuss it in the comments area below, or by phone.

I think the real key idea for the real estate world is that the bill had provisions for the Government to buy "troubled" loans from the banks, which would in turn give the banks short term cash to #1 - stay in business so Buyer can #2 - continue to get loans. 

The Government would, in turn, be able to not only renegotiate interest rates with troubled borrowers, but potentially LOWER their princpal balances based on current market values. That is a bizarre thought, isn't it?

SOME IMPORTANT QUESTIONS:

1. Should troubled homeowners be able to get loan balances lowered while those who aren't in trouble don't? What do you think?

2. Is all this stalling just so McCain & Obama can avoid looking like idiots if the bill fails and they are elected President?

3. Does Nancy Pelosi just generally tick you off every  time she opens her mouth, or does she bring back warm memories of your childhood when your mother scolded you for using a cuss word?

What I do know is this: I SHUDDER to think of a world where credit was no longer available. At first I was prone to only think of home loans and credit cards, but now I realize that this would extend to student loans and more...YIKES! 

AT THE SAME TIME, we continue to see Buyers obtain financing for home purchases without jumping through (in my perspective) too many proverbial hoops, so it is hard for me to really believe that credit is on the brink of totally drying up.

Stay tuned......

I'll keep this short: Existing-home sales rose from the first quarter in 13 states, apparently from buyers responding to discounted home prices, according to the latest quarterly survey by the National Association of Realtors®. Nearly 25% of metropolitan areas showed rising home prices in the 2nd quarter from a year ago, with greatly mixed conditions continuing around the country.

In the West, the median existing single-family home price was $290,600 in the second quarter, which is 17.4 percent below a year ago. After Yakima, the strongest metro price increase in the West was in the Salt Lake City area, at $234,200, up 0.5 percent from a year ago; all other metro areas reported for the West were down from the second quarter of 2007.

What does this mean for Washington County? Perhaps nothing as "all real estate is local", but perhaps something based on the general activity level that exists currently in our local market. In the marketing of our Larkin Group Listings, we use a varitey of tools to track everything from the total number of buyer calls and visits, to the media source they originated from. (I often feel a bit like "Big Brother...")

From this data I can that the Buyers are OUT THERE. They are calling, surfing the web, following prices, trying to figure out "what to do."  Whereas 1 year ago there was just a sense in the "trenches" of the business that the Buyers were hiding out.

I'd love your opinion.....has anyone else out there gotten the sense that prices have finally reached a level that actually makes sense for today's fence-sitting buyers?