Gilbert Arizona Real Estate

Good news - Gilbert Home Buyers!

Have you heard about the $8,000 tax credit for first time home buyers?  This tax credit is as good as a check in the bank!  If your tax liability is less than the credit, you get paid the difference!  Read more about the Housing Stimulus Tax Credit by clicking here.

The new news is this: Gilbert Home Buyers can use the tax credit towards their down payment, closing costs, and other prepaid expenses!  Too good to be true?  You can click here and get the latest HUD Mortgagee Letter 2009-15.  This long-awaited measure will assist first time Gilbert Home Buyers (anyone buying their first home) with the up-front costs including down payment, escrow fees, title insurance and other pre-paid items due at close of escrow.

The advance use of the credit (you don’t get the money until 2010) is accomplished through a short-term note (much like a bridge loan), which FHA lenders and other qualifying lenders arrange at the time you agree to the original mortgage on your home.  The money gets paid back when the credit is paid by the IRS.  Essentially, you sign over your rights to the credit money when you get your loan.

For 2009 Home Purchases

The American Recovery and Reinvestment Act of 2009 expanded the first-time homebuyer credit by increasing the credit amount to $8,000 for purchases made in 2009 before Dec. 1.

For home purchased in 2009, the credit does not have to be paid back unless the home ceases to be the taxpayer’s main residence within a three-year period following the purchase.

Want more details, click here.

For quick answers to your questions about this tax credit and how it applies to your next home purchase, call now!

Jack Burns

480-225-6592

email: burnsteam@cox.net

web site: http://www.myazrealtor.com

Buy a Gilbert Home now!  Is that what you are hearing?

Let me tell you why that may be good advice.

Home prices in Gilbert and the Phoenix Metro area are no longer in a down trend.  Since January of 2009 prices have actually been on the increase.  The reason?  First time home buyers are taking advantage of the government’s stimulus plan, giving up to $8,000 in tax credits for first time buyers, and those who  have not owned a home for at least three years.  Don’t forget about some of the best interest rates (under 5%) most of April and May.  And . . . the prices of existing homes are way below the cost of new construction (Gilbert Homes are a Great Bargain!)

Investors have come back into Gilbert, and are buying up most available inventory of bank-owned homes (REO’s), often paying cash and walking away with the cream of the crop.  Home buyers (Owner occupied) looking for bargains must fight it out with the investors!  That means the decision to buy now, may take more patience than when the market was booming in 2004-2005!

Inventory of available homes has plumeted from abundance in 2008 (over 12 month supply) to just over a 6 month supply in May of 2009.  And would you believe that most listings which show well, receive from ten to twenty offers!  Contract prices are nearly always 10-15 percent over list price.  The MLS auction has begun once again.  Buying a home in Gilbert or any of the Phoenix metro cities requires diligence, patience and nerves of steel!  If you are easily discouraged because your offers are being turned down, perhaps a change in strategy is in order?

Check out the facts!  Fletcher Wilcox, Vice President of Business Development with Grand Canyon Title Agency in Phoenix has provided some excellent data to show how dramatically the market has changed!  Don’t delay.  You may miss one of the last opportunities to profit from the Gilbert homes market!

Call me or send an email and ask me to send you some listings.

Or you may want to log onto my web site: www.myazrealtor.com and check out the market for yourself!

Jack Burns

480-225-6592

email: burnsteam@cox.net

Gilbert Home Owners and Gilbert Home Buyers Win!

Keep Informed!

In January 2009, the Securities and Exchange Commission’s (SEC) Chief Accountant, the Financial Accounting Standards Board’s (FASB) Chairman and the Deputy Comptroller for Regulatory Policy in the Treasury Department testified in front of the House Financial Services committee on the “Mark-to-Market” accounting rule. This rule was created so that there would be more transparency in business dealings, but fell prey to the law of “unintended consequences”, and has played a major part in our current financial crisis.

During the hearing, Congress demanded an answer for repairing this situation within the next three weeks, so right now, it looks like we will see some sort of coordinated action by both the FASB and the SEC to address the Mark-to-Market situation soon. Stocks certainly reacted positively to this news last week, as well as to Citigroup’s announcement that it will not need more TARP money from the government. Stocks also liked the remarks from Federal Reserve Chairman Bernanke that the recession would be over by year-end if the banking situation is stabilized, and that major financial institutions would not be allowed to fail.

How the “Mark to Market” measure affects our banking system and you!  Click here to view an informative video by Barry Habib, Chairman of Mortgage Success Source.

Barry Habib Chairman of the Board, Mortgage Success Source

The financial crisis we are in today was not caused by mortgages or housing, although they were both catalysts. The real reason was an accounting rule called “Mark to Market” (also known as FASB 157).  Few people have a strong grasp of this rule, and even those who do have a tough time explaining it on air due to time restrictions. So let’s take a few minutes to break it down, so you can have the inside track on this very important concept and understand why it represents some great opportunities.

Why does ‘Mark to Market’ exist?

Let’s go back to the stock market crash, which occurred between 2000 and 2002. With the S&P down 49% and the NASDAQ down 71%, many people lost much of their life savings and they were very angry.  Companies like Enron and Arthur Andersen were able to find ways to make their books looks more attractive, which was reflected in an artificially inflated stock price.

Both the public and Congress had a call for more transparency in business and hastened the passage of “Mark to Market” accounting.  This is the notion that all assets should be valued as if they were sold on a daily basis. Under the letter of the law, failure to do this conservatively can now result in jail time.

So what’s the problem?

Before we get into what this means for banks, let me make a quick analogy using a scenario that should make perfect sense to you and your clients.

Let’s imagine that you own a house in a neighborhood where all of the houses are priced at around $300,000. Unfortunately, your neighbor, who owns his home free and clear, falls ill and needs emergency cash quickly. Because he is under duress, he must sell the home for $200,000 in order to get the cash he needs right away, even though the home is worth considerably more.

Now would this mean that your home is now worth the same $200,000 that your neighbor sold his for? Of course not, because you are not forced to sell under duress.

It just means that your new neighbor got a great deal.  However, if you were a publicly traded company and had to abide by Mark to Market account rules, you and the rest of your neighbors would now have to say, by law, that your home was worth only $200,000 - not the $300,000 you would get for it if you actually sold. So what’s the big deal? Read on.

So how does this principle apply to banks?

Let’s say we decide to start a bank . . . call it XYZ Bank. We raise $2 Million to open our doors. Remember that our capital account is $2 Million. Banks make money by taking in deposits and paying low rates of interest to those depositors (maybe throw in a toaster too). We then take that money and make loans with it at higher rates. We keep the difference.

So, we turn that money into $30 Million worth of loans. This puts our ratio of loans to capital (our Capital Ratio) at 15:1 ($15 Million in Loans to $1 Million in Capital). This level is acceptable, as long as we can shoulder some losses and recover.

Because we are very conservative here at XYZ Bank, the loans we make require a minimum down payment of 30%, a credit score of 800 or better (that’s nearly an 850 which is perfect), proof of income and assets, a reserve of at least two

years of mortgage payments (normal is two months) and income requirements that only allow 10% of monthly income to cover all expenses (normal is 40%).

We do this and our loans perform perfectly. We make lots of money. Nobody is paying late and our clients are sending us holiday cards. They love us . . . it’s a party. You and I are celebrating as we see our stock price soar.

But real estate values decline and, even though all of our loans are paying perfectly, we must re-assess the loan portfolio to account for the decline in real estate values, which leaves us with less of an equity cushion. We had a minimum 30% down payment, which means the loans were 70% of the value of our assets - until we account for the decline in

the market. Now, our position goes from 70% to 90%. That’s riskier and, therefore, worth less than when our loans had a 70% safety position.  Our accountants tell us that we must “Mark to Market” or risk jail. They say our value is now reduced by $1 Million. Whoa!  We must take (or write down) this loss against our capital account. It is a paper loss - we don’t write a check, we have no late payers, no defaults, no bad business decisions. Still, we must reflect this $1 Million paper loss in our Capital Account, which drops from a $2 Million to $1 Million in value.

 Here’s where things get problematic.

At this level, with $30 Million in loans outstanding, we now have a capital ratio of 30:1. At

this level of leverage, alarms begin to sound.  Our ratios are out of the safe zone; we could go under with just a few losses, deposits are in jeopardy. Hello FDIC examiner, we are on the watch list, the Securities and Exchange Commission (SEC) is asking questions and our stock starts to tumble. The business networks are showing coverage of our now troubled bank. We are in big trouble.

The problem, we are “over leveraged”. The solution? We have to “de-lever” . . . and do so quickly. But there are only two ways to do that, and one of them isn’t really an option.

The first way is to raise capital, but that’s not going to happen when our ratios are out of whack and we are in serious trouble as well as on the FDIC watch list. It is unlikely that anyone will be willing to invest cash in XYZ Bank.  The other option is that we can sell assets, like the outstanding loans, which are increasing our capital ratio. Like your neighbor, who owned his home outright but needed cash for medical bills, we are now under duress. The paper we are holding has a lot of value, but we have to sell it quickly and, because of that, cheaply. So, we offload the loans at a loss, which exacerbates the problem because those losses further reduce our capital account.  Very quickly, like a flushing toilet, things start to spiral - we are going down.

The problem multiplies

The problem doesn’t stop there. The fire sale we just had on our loans makes things worse - even for the banks that bought them up and thought they were getting a great deal.

Under Mark to Market, the loans we just sold must be included in the comparables that other financial institutions use to value their assets. This is how the problem spread and got so bad so fast. Other good institutions, with good loans, have to mark down. Just like us, they become over-leveraged. It’s a chain reaction, all triggered by a well intentioned, but over-reaching accounting rule.

Financial institutions fold, sell, or freeze. Credit - the life blood of our economy - is cut off at the source. Because of a lack of available credit, home sales and refinances crawl, auto sales drop and jobs are lost. Additionally, the economy enters a recession.  During the last recession in 2001, the economy recovered relatively quickly thanks to $3 Trillion worth of home equity withdrawals. But, more restrictive programs, a lack of available credit, and lower home values will make it difficult for us to use home equity to help pull us out of a recession this time around.

Fixing the problem

The Federal Reserve has passed a rescue plan, which, over time, will provide some level of help. Some banks will get money to infuse into their capital accounts. Others can sell some assets to the government in an effort to “de-lever”.  But, the big thing that is not talked about, not well understood, is the part of the rescue plan that traces this financial crisis back to the source.

The US Congress has given the SEC its blessing to modify “Mark to Market” accounting. And by January 2, SEC Chairman, Chris Cox has to get back to Congress with ideas, if any, on how to fix Mark to Market accounting.  It won’t be eliminated, as we will not want to go back to the Enron days. But he is likely to adjust the Mark to Market provisions.

Homeowner Affordability and Stability Plan

for Gilbert, Mesa, Chandler and Queen Creek!

Excerpt from Fact Sheet by US Treasury Department.

The deep contraction in the economy and in the housing market has created devastating consequences for homeowners and communities throughout the country. Millions of responsible families who make their monthly payments and fulfill their obligations have seen their property values fall, and are now unable to refinance to lower mortgage rates. 

By supporting low mortgage rates by strengthening confidence in Fannie Mae and Freddie Mac, providing new access to refinancing and enacting a comprehensive stability initiative to offer reduced monthly payments for at-risk homeowners, this plan brings together the government, lenders and borrowers to share responsibility towards ensuring working Americans can afford to stay in their homes.

Homeowner Affordability and Stability Plan

1. Refinancing for Responsible Homeowners Suffering From Falling Home Prices

2. A Comprehensive $75 Billion Homeowner Stability Initiative

• A Loan Modification Plan To Reach 3 to 4 Million Homeowners
  • Shared Effort with Lenders to Reduce Interest Payments
  • Incentives to Servicers and Borrowers

• Clear and Consistent Guidelines for Loan Modifications

• Required Participation By Financial Stability Plan Participants

• Modifications of Home Mortgages During Bankruptcy

• Strengthen Hope for Homeowners and Other FHA Loan Programs

• Support Local Communities and Help Displaced Renters

3. Support Low Mortgage Rates by Strengthening Confidence in

Fannie Mae and Freddie Mac

The Homeowner Stability Initiative operates through a shared partnership to temporarily help those who commit to make reasonable monthly mortgage payments to stay in their homes, providing families with security and neighborhoods with stability. This plan will also help to stabilize home prices for homeowners in neighborhoods hardest hit by foreclosures.

Who the Program Reaches:

Focusing on Homeowners At Risk: Anyone with high combined mortgage debt compared to income or who is “underwater” (with a combined mortgage balance higher than the current market value of his house) may be eligible for a loan modification. This initiative will also include borrowers who show other indications of being at risk of default. Eligibility for the program will sunset at the end of three years.

Reaching Homeowners Who Have Not Missed Payments: Delinquency will not be a requirement for eligibility. Rather, because loan modifications are more likely to succeed if they are made before a borrower misses a payment, the plan will include households at risk of imminent default despite being current on their mortgage payments.

Common Sense Restrictions: Only owner-occupied homes qualify; no home mortgages larger than the Freddie/Fannie conforming limits will be eligible. This initiative will go solely to supporting responsible homeowners willing to make payments to stay in their home – it will not aid speculators or house flippers.

Special Provisions for Families with High Total Debt Levels: Borrowers with high total debt qualify, but only if they agree to enter HUD-certified consumer debt counseling. Specifically, homeowners with total “back end” debt (which includes not only housing debt, but other debt including car loans and credit card debt) equal to 55% or more of their income will be required to agree to enter a counseling program as a condition for a modification.
How the Program Works

The Homeowner Stability Initiative has a simple goal: reduce the amount homeowners owe per month to sustainable levels. This program will bring together lenders, servicers, borrowers, and the government, so that all stakeholders share in

The cost of ensuring that responsible homeowners can afford their monthly mortgage payments – helping to reach up to 3 to 4 million at-risk borrowers in all segments of the mortgage market, reducing foreclosures, and helping to avoid further downward pressures on overall home prices.

Shared Effort to Reduce Monthly Payments: Treasury will partner with financial institutions to reduce homeowners’ monthly mortgage payments.

The lender will have to first reduce interest rates on mortgages to a specified affordability level (specifically, bring down rates so that the borrower’s monthly mortgage payment is no greater than 38% of his or her income).

Next, the initiative will match further reductions in interest payments dollar-for-dollar with the lender, down to a 31% debt-to-income ratio for the borrower.

“Pay for Success” Incentives to Servicers: Servicers will receive an up-front fee of $1,000 for each eligible modification meeting guidelines established under this initiative. Servicers will also receive “pay for success” fees – awarded monthly as long as the borrower stays current on the loan – of up to $1,000 each year for three years.

Responsible Modification Incentives: Because loan modifications are more likely to succeed if they are made before a borrower misses a payment, the plan will include an incentive payment of $1,500 to mortgage holders and $500 for servicers for modifications made while a borrower at risk of imminent default is still current.

Incentives to Help Borrowers Stay Current: To provide an extra incentive for borrowers to keep paying on time under the modified loan, the initiative will provide a monthly balance reduction payment that goes straight towards reducing the principal balance on the mortgage loan. As long as the borrower stays current on his or her payments, he or she can get up to $1,000 each year for five years.

Home Price Decline Reserve Payments: To encourage lenders to modify more mortgages and enable more families to keep their homes, the Administration — together with the FDIC — has developed an innovative partial guarantee initiative. The insurance fund – to be created by the Treasury Department at a size of up to $10 billion – will be designed to discourage lenders from opting to foreclose on mortgages that could be viable now out of fear that home prices will fall even further later on.

For a complete Summary of the Homeowner Affordability and Stability Plan - Fact Sheet click HERE

Want to know if you qualify for this plan?  Click HERE

5 Reasons to Buy a Gilbert Home This Year

1. Affordability is better than ever.

According to the National Association of Realtors’ housing affordability index, homes were more affordable in December than at any other point since the group started the index in 1970. The NAR’s affordability index is a measure of the relationship between home prices, mortgage interest rates and family income.

In Gilbert, average home prices have fallen over 40 percent from $366,252 in February, 2005 - to $216,623 in February, 2009, according to Arizona’s MLS.

2. You have a large inventory to choose from.

In there is plenty of inventory to choose from. There are currently 2,137 ACtive Listings (homes for sale through MLS), which represents a nine-month supply. December listings totaled 2,240. The bottom line? Home sales are increasing, inventory is on the decline!

A large selection gives buyers more choices and drives down prices. And home sellers have gotten the picture.

But if you put off a purchase until inventory shrinks substantially, you might not get as good a price, said Eddie Fadel, author of the book, “Don’t Rent, Buy!” And be forewarned: It’s nearly impossible to time the exact bottom of the housing market, and even if you do, there’s no guarantee you’ll make a killing.

“You buy for quality of life . . . don’t buy on speculation,” said Duane Andrews, chief executive officer of Clear Capital. “I wouldn’t buy a home expecting the housing market to rebound quickly in the next 10 years,” he said, adding that he expects moderate gains in values when the turnaround does happen.

Historically, real estate appreciates about 5% a year over the long term, said Nancy Flint-Budde, a Salem, N.Y.,-based certified financial planner. But as the country crawls out of a recession, many markets probably won’t see huge home-price gains any time soon.

3. Builders are offering big discounts.

Home builders are getting even more aggressive with their pricing.

In fact, Fadel recommends looking at completed new homes first because builders are offering such steep discounts. Plus, you’d have a warranty not only on the home itself, but also on the home’s appliances, he said.

“[Builders] want to save their credit, save their brand, save their reputation and clear out inventory,” he said. “They can go buy cheap land today with that cash.”

His advice: Walk in with a preapproval for a mortgage, make an offer, then walk away without making a deal if you have to.

4. Mortgage rates are historically low.

It’s not just the price of the home that will affect affordability; mortgage terms will also affect your monthly payments. These days, rates are very attractive for conforming loans, those that can be purchased by mortgage agencies Fannie Mae and Freddie Mac. (The current limit is $417,000)

Earlier this year, rates on the popular 30-year fixed-rate mortgage hit a level not seen in decades, and rates have stayed relatively near that low for weeks. The first week of February, the 30-year fixed-rate mortgage averaged 5.25%, according to Freddie Mac’s weekly mortgage survey.

More mortgage help could also be on the way. Last week, President Obama said that his new economic plan would help lower the cost of mortgages for home buyers, although he did not give specifics.

But low rates don’t mean lenders are handing out mortgages easily. You’ll need good credit, a substantial down payment and a willingness to document your income in order to qualify for those great rates — if you can qualify at all.

5. You can get a federal tax credit.

Gilbert home buyers who haven’t owned a home in at least three years? The economic stimulus plan recently signed by Obama has raised the tax credit for first-time home buyers to $8,000 for homes bought between Jan. 1 and Nov. 30 of this year. That money would not have to be paid back if the home is not resold for at least three years.

That extra cash will come in handy: The average first-time homebuyer spends about $6,000 in the first six months of owning a home.

Want help with your next home buying decision? Call Jack Burns 480-225-6592

www.myazrealtor.com

_____________________________________________________

Obama Unveils Homeowner Affordability and Stability Plan

President Obama unveiled (February 19, 2009) his plan to help stabilize the housing market and keep millions of borrowers in their homes.

The Homeowner Affordability and Stability Plan includes two initiatives to help struggling Gilbert homeowners. One is a refinancing program for homeowners with less than 20% equity in their homes, or who owe more than their home is worth. The second program attempts to lower monthly payments for homeowners at risk of losing their home. In addition, the plan includes a third initiative to support low mortgage rates by strengthening confidence in Fannie Mae and Freddie Mac.

Many of the plan’s details are still being worked out and will not be announced until March 4, here is an overview of the plan’s main components.

Refinancing Initiative
Under current rules, those families who own less than 20% equity in their Gilbert homes have a difficult time refinancing and taking advantage of the historically low interest rates. Therefore, the refinancing initiative in the new plan provides refinancing help for homeowners with less than 20% equity in their homes or who owe more than their home is worth. This initiative is open to homeowners who have conforming loans which are guaranteed by Fannie Mae and Freddie Mac, and who owe up to 5% more than their home is worth.

According to the plan, “credit-worthy” or “responsible” homeowners can refinance their mortgage into a 30- or 15-year, fixed-rate loan based on current market rates. The refinanced loan, however, cannot include prepayment penalties or balloon payments. For many families, this low-cost refinancing may help reduce their mortgage payments by up to thousands of dollars per year.

As with the rest of the plan, details about this initiative will be released at a future date—including what, if any, credit score requirements will be included.

Stability Initiative
This initiative aims at providing help to individual families as well as entire Gilbert neighborhoods by helping reduce foreclosures and stabilize home prices. It is intended to help homeowners who are struggling to afford their mortgage payments, but cannot sell their homes because prices have fallen significantly.

The goal of this initiative is simple: “reduce the amount homeowners owe per month to sustainable levels.” To accomplish this, lenders are encouraged to lower homeowners’ payments to 31 percent of their income by lowering their interest rate to as low as 2% or by extending the terms of the loan. In addition, lenders can also lower the principal owed by the borrower, with Treasury sharing in the costs.

Homeowners who are current on their mortgages but are struggling can still apply for this program. As such, this is one of the few programs designed to help homeowners who may face delinquency soon, but are current at the moment.

Since the focus of this initiative is on helping families and neighborhoods, investment properties do not qualify. This initiative also includes a number of additional elements and incentives that benefit homeowners and lenders alike, including:

• Incentives to Help Borrowers Stay Current: To provide an extra incentive for borrowers to keep paying on time, the initiative will provide a monthly balance reduction payment that goes straight towards reducing the principal balance of the mortgage loan. As long as a borrower stays current on his or her loan, he or she can get up to $1,000 each year for five years.
• Reaching Borrowers Early: To keep lenders focused on reaching borrowers who are trying their best to stay current on their mortgages, an incentive payment of $500 will be paid to servicers, and an incentive payment of $1,500 will be paid to mortgage holders, if they modify at-risk loans before the borrower falls behind.

Supporting Low Mortgage Rates
As part of the Homeowner Affordability and Stability Plan, the Treasury Department is increasing its funding commitment to Fannie Mae and Freddie Mac to ensure the strength and security of the mortgage market and to help maintain mortgage affordability. This portion of the plan will use using funds already authorized in 2008 by Congress for this purpose.

The increased funding will enable Fannie Mae and Freddie Mac to carry out ambitious efforts to ensure mortgage affordability for responsible homeowners, and provide forward-looking confidence in the mortgage market.

Again, the government plans to unveil the final details of the plan on March 4, 2009. For now, you can download a sheet of common Questions and Answers produced by the government at: www.treas.gov/initiatives/eesa/homeowner-affordability-plan/ConsumerQA.pdf

Need more information?  Call Jack Burns (480) 225-6592

Help! for Gilbert Home Buyers

Tax Credits for First-Time Gilbert Home Buyers
Here is an overview of some benefits of the Economic Stimulus Plan for 2009 that may impact your decisaion to buy a home in Gilbert, Arizona.

$8,000 Home Buyer Tax Credit at a Glance

·   The tax credit is for first-time home buyers only.

·   The tax credit does not have to be repaid as long as the homebuyer keeps the home for 3 years

·   The tax credit is equal to 10 percent of the home’s purchase price up to a maximum of $8,000.

·   The credit is available for homes purchased on or after January 1, 2009 and before December 1, 2009.

·   Single taxpayers with incomes up to $75,000 and married couples with incomes up to $150,000 qualify for the full tax credit.

Stimulus Plan - Tax Credit for Gilbert Home Buyers

The $787 Billion stimulus bill is made up of tax cuts and spending programs aimed at reviving the US economy. One of the major benefits of the plan is a tax credit for new homebuyers. According to the plan, first-time homebuyers who purchase homes from January 1, 2009 until the end of November 2009 may be eligible for the lower of an $8,000 or 10% of the value of the home as a tax credit.

It’s important to remember that the $8,000 tax credit is just that… a tax credit. The benefit of a tax credit is that it’s a dollar-for-dollar tax reduction. For example, if you were to have a tax bill (line 27 on IRS Form 1040 or 1041) of $8,000 or less, and you qualified for the first time Gilbert home buyer tax credit, and the purchase price of the home was at least $80,000, you would owe Uncle Sam nothing (zero).

Better still, the tax credit is refundable, which means you can receive a check for the credit even if you have little income tax liability. For example, if you’re liable for $3,500 in income tax, you can use $3,500 of the tax credit… and still receive a check for the remaining $4,500!

The tax credit starts phasing out for couples with incomes above $150,000 and single filers with incomes above $75,000.

The tax credit is applicable to any home that will be used as a principle residence. Based on that guideline, qualifying “homes” include single-family detached homes, as well as attached homes such as townhouses and condominiums. In addition, manufactured or homes and houseboats used for principle residence also qualify. Buyers will have to repay the credit if they sell their homes within three years.

For More complete story click Here

For More Help call Jack Burns 480-225-6592

  Selling Gilbert Homes

Gilbert Home Buyers See Lower Prices 

Lawrence Yun, National Association of Realtors chief economist, said the market is clearly depressed from job losses and consumer concerns about the economy. “Assuming housing provisions in the economic stimulus package are quickly enacted and provide enough encouragement for home buyers, we could see a quick lift in home sales for the critical spring home-buying season,” he said.“If that occurs, we could see home prices begin to stabilize in many metro areas later this year as supply and demand begin to return to balance, which would greatly benefit the overall economy,” Yun said.

According to Freddie Mac, the national average commitment rate on a 30-year conventional fixed-rate mortgage fell to 5.86 percent in the fourth quarter from 6.32 percent in the third quarter; the rate was 6.23 percent in the fourth quarter of 2007.

The largest sales gain in the fourth quarter from a year earlier was in Nevada, up 133.7 percent, followed by California which rose 84.7 percent, Arizona, up 42.6 percent, and Florida with a 12.5 percent increase.

“Once again, we see a pattern of strong sales gains, particularly in lower price homes, in areas with price declines resulting from foreclosures,” Yun said. “For example, in California and Florida, where distressed sales accounted for roughly two-third of all sales, the median price fell by much more as lower priced home sales far outpaced higher priced sales.”

Areas with the steepest declines in single-family home prices, more than 30 percent below the fourth quarter of 2007, include Las Vegas-Paradise, seven metro areas in California, Phoenix-Mesa-Scottsdale, and three metros in Florida. “Clearly these areas are attracting bargain hunters,” Yun added.

Source: NAR

Time to invest?  Give me a call  Jack Burns 480-225-6592

Gilbert Homebuyer Tax Credit Plan May Be in Jeopardy

As Senate and House negotiators hash out the details of a compromise on the economic stimulus bill, there’s no question that now in jeopardy are a few very popular items that popped up as amendments along the way.

For one, we’re told that the homebuyers’ amendment approved by a bipartisan voice vote last week may be out already. Republican Senator Johnny Isakson of Georgia proposed a $15,000 tax credit for buyers of new homes within a year or so of the bill taking effect. Initially, the cost was estimated at $18.5 billion, but has now been recalculated by the Congressional Budget Office at about $35.5 billion.

That’s far more than the estimated $2.6 billion estimate for a provision in the House bill that would provide a $7,500 refundable tax credit for first-time homebuyers through July 1, 2009. Under the House plan, individual homebuyers earning up $75,000 and couples earning up to $150,000 would qualify. A reduced credit would be available for those individuals earning up to $95,000 and couples up to $170,000.

Stay tuned!  We’ll keep you posted.