Housing Market Stimulus

http://isakson.senate.gov/press/2009/020409housing.htm

FOR IMMEDIATE RELEASE
Wednesday, February 4, 2009

Senate Unanimously Approves Isakson Amendment to Stimulate Housing Market
Homebuyer Tax Credit Revived Market in 1975 and Would Work Today

WASHINGTON – The U.S. Senate today unanimously approved an amendment by U.S. Senator Johnny Isakson, R-Ga., to stimulate the nation’s declining housing market by offering a $15,000 tax credit to individuals who purchase a home in the next year.

“It is time to fix America’s problem, not throw money at the symptoms. It is time to fix housing first. It is rare that we have a road map to success in times of difficulty, but this country has once before realized a housing crisis every bit as bad as the one we have today and economic troubles every bit as dangerous,” Isakson said. “We have a pervasive housing problem, and we have a historical precedent that works. I am proud this Senate has joined together, learned from history and repeated a method that worked by adopting this amendment.”

Specifically, Isakson’s amendment to the pending economic stimulus bill would provide a direct tax credit to any homebuyer who purchases any home. The amount of the tax credit would be $15,000 or 10 percent of the purchase price, whichever is less. Purchases must be made within one year of the legislation’s enactment, and the tax credit would not have to be repaid.

The amendment would allow taxpayers to claim the credit on their 2008 income tax return. It also seeks to prevent misuse by only allowing purchases of a principal residence and by recapturing the credit if the home is sold within two years of purchase. The amendment would sunset the current $7,500 housing tax credit on the date of enactment.

Isakson has pushed hard for a non-repayable tax credit for homebuyers because he knows that it will work. In the mid-1970s, America faced a similar housing crisis when a period of easy credit and loose underwriting flooded the market with new construction.  Interest rates rose, the economy slowed and America was left with a three-year supply of vacant homes. Congress responded by passing a $2,000 tax credit for anyone purchasing a new home for their principal residence. Isakson believes the results were clear and swift as home values stabilized, housing inventory dropped and the market recovered.

Last year, Isakson introduced legislation to specifically target those homes that were causing the unprecedented increase in housing inventory by offering tax credits to individuals purchasing a foreclosed home or a home where foreclosure is pending. In April 2008, the Senate passed legislation to stimulate the nation’s declining housing market that included Isakson’s proposal. However, the final version of the legislation that was signed into law included only a $7,500 tax credit for first-time homebuyers that must be repaid over a 15-year period. Isakson’s amendment that passed today would sunset that $7,500 tax credit.

Isakson spent more than three decades in the real estate business, beginning his business career in 1967 when he opened the first Cobb County, Ga., office of a small, family-owned real estate business, Northside Realty. Isakson later served as president of Northside for 20 years, presiding over the company’s growth into the largest independent residential real estate brokerage company in the Southeast and one of the largest in America.

Isakson has not made a decision regarding his vote on the overall economic stimulus legislation.

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Existing Home Sales Rise in February

National Association of Realtors
WASHINGTON, March 24, 2008 -
Sales of existing homes increased in February and remain within a fairly stable range, according to the National Association of Realtors®.
Existing-home sales – including single-family, townhomes, condominiums and co-ops – rose 2.9 percent to a seasonally adjusted annual rate (1) of 5.03 million units in February from a pace of 4.89 million in January, but remain 23.8 percent below the 6.60 million-unit level in February 2007. The sales pace has been in a fairly narrow range since last September.
Lawrence Yun, NAR chief economist, said the gain is encouraging. “We’re not expecting a notable gain in existing-home sales until the second half of this year, but the improvement is another sign that the market is stabilizing,” he said. “Buyers taking advantage of higher loan limits for both FHA and conventional mortgages will unleash some pent-up demand. As inventories are drawn down, prices in many markets should go positive later this year.”
The national median existing-home price (2) for all housing types was $195,900 in February, down 8.2 percent from a year earlier when the median was $213,500. Because the slowdown in sales from a year ago is greater in high-cost areas, there is a downward pull to the national median with relatively fewer sales in higher priced markets.
Home prices within metropolitan areas are more telling. The most recent data shows roughly half of the metro areas in the U.S. with price increases, with healthy gains in markets such as Oklahoma City and Trenton, N.J. “In other areas such as Sacramento, a rapid price decline has induced buyers to come into the market and sales are now rising,” Yun said. “The relationship between home prices, interest rates and income has improved to the point where buyers are more serious about making offers.”
According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage rose to 5.92 percent in February from 5.76 percent in January; the rate was 6.29 percent in February 2007.
NAR President Richard F. Gaylord, a broker with RE/MAX Real Estate Specialists in Long Beach, Calif., said that negotiation and knowledge are even more important in the current market. “Consumers need to be aware of local market conditions and comparable sales prices to have a clear picture of a home’s value,” he said. “Realtors® understanding of local markets, negotiating expertise, and transaction experience are invaluable to both buyers and sellers, today as much as ever.”
Total housing inventory fell 3.0 percent at the end of February to 4.03 million existing homes available for sale, which represents a 9.6-month supply (3) at the current sales pace, down from a 10.2-month supply in January.
Single-family home sales increased 2.8 percent to a seasonally adjusted annual rate of 4.47 million in February from an upwardly revised 4.35 million in January, but are 22.9 percent below 5.80 million-unit level a year ago. The median existing single-family home price was $193,900 in February, down 8.7 percent from February 2007.
Existing condominium and co-op sales rose 3.7 percent to a seasonally adjusted annual rate of 560,000 units in February from a downwardly revised 540,000 in January, and are 29.7 percent below the 797,000-unit pace in February 2007. The median existing condo price (4) was $211,700 in February, which is 4.9 percent lower than a year ago.
Regionally, existing-home sales in the Northeast jumped 11.3 percent to an annual pace of 890,000 in February, but are 26.4 percent below February 2007. The median price in the Northeast was $264,800, up 0.4 percent from a year ago.
Existing-home sales in the Midwest rose 2.5 percent in February to a level of 1.24 million but are 19.5 percent below a year ago. The median price in the Midwest was $143,900, which is 7.1 percent lower than February 2007.
In the South, existing-home sales increased 2.1 percent to an annual rate of 1.99 million in February but are 22.0 percent below February 2007. The median price in the South was $163,400, down 8.6 percent from a year ago.
Existing-home sales in the West slipped 1.1 percent to an annual rate of 920,000 in February, and are 29.2 percent below a year ago. The median price in the West was $290,400, down 13.4 percent from February 2007.
The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing 1.3 million members involved in all aspects of the residential and commercial real estate industries.
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January/February Home Maintenance Checklist

January/February
1. Clean or replace furnace filter.
2. Check and clean mechanical ventilation system (HRV/ERV). Check your manual and follow manufacturer’s recommendations.
3. Clean snow from air intakes, exhausts and meters.
4. Clean range hood filter.
5. Remove excess snow from roof to prevent ice dams.
6. Clean and check sump pump and pit.
7. Inspect pressure and temperature valve on water heater (recommendations and safety needs).
8. Clean faucet aerators and turn on infrequently used faucets and put water in floor drains to maintain the trap’s water barrier
9. Observe humidity levels and adjust the setting on the humidistat or air exchanger controller as needed to eliminate condensation or frost on windows.

November/December Home Maintenance Checklist

Follow these links through partner, Home-Smart.org to receive specific information on each checklist item:

1. Clean or replace furnace filter.
2. Check and clean mechanical ventilation system (HRV/ERV). Check your manual and follow manufacturer’s recommendations.
3. Check exhaust fans.
4. Clear air intakes, exhausts and meters of snow, debris, etc.
5. Remove excess snow from roof to prevent ice dams.
6. Check adjustment of door thresholds.
7. Observe humidity levels and adjust the setting on the humidistat or air exchanger controller as needed to eliminate condensation or frost on windows.

Happy Holidays

Greetings everyone!

This is my first blog on my new blogsite so bear with me on content as it learn how to tune in my content.

This past week we saw a roller-coaster for home mortgage interest rates. Starting out the week we saw conventional-conforming rates at 5.75% and ended the week at 6.25%. This shows the continued volitality of our market and the importance of developing a strong relationship with a lender who can keep you up to date on today's rates and trends.

We are in a buyer's market with tremendous values and sellers willing to look at all realistic offfers. While the market values of homes continue to soften, in reality homes are still selling for 97%-98% of list price in many situations. Keep in mind that each transaction is unique and all of the variables need to be looked at individually.

current temp is 5 degrees F