11.5.09 Senate Passes Tax Credit Extension, House Set to Vote

Yesterday the Senate voted to approve the extension and expansion of the homebuyer tax credit set to expire at the end of this month. Congress will vote today and is expected to pass the measure. The new rules of the tax credit will continue to allow first-time homebuyers or anyone who has not owned a home in 3 years to claim an $8,000 deduction on their taxes. Additionally, buyers who have owned their homes at least 5 years will be eligible for up to $6,500 in tax credits. The extension will last until the end of April, 2010, with all deals needing to close by the end of June. The credit can only be used for the purchase of a principal residence of $800,000 or less, which in the Bay Area will mean that some homebuyers are unable to taxe advantage of the credit. Also, there are income level restrictions on who is eligible for the tax credit ($125,000 for individuals, and $225,000 for those filing jointly).
The tax credit extension is good news for Bay Area home sales. We will continue to see a strong group of buyers out to take advantage of good home prices and tax incentives leading into 2010.

10.28.09 Further Reports of Tax Credit Extension

Senate Democrats would like to extend the homebuyer tax credit. Details are scarce as an exact agreement has not been reached yet, and an amendment for an extension of the tax credit has not been brought to the Senate floor yet. According to this source, 'about 1.5 million tax returns filed with the Internal Revenue Service have claimed the credit, at a cost of $10 billion, since it was first approved in February 2008.' This measure clearly helped boost the housing market during the economic downturn. It remains to be seen if the first-time homebuyer tax credit will simply be extended into 2010 or if it will also be expanded to include all homebuyers and how it will be phased out. An extension of the tax credit is good news for local homebuyers who can continue to take advantage of great values in the Bay Area with the added incentive of tax relief.

10.6.09 Presidential Support for Homebuyer Tax Credit Extension

For the first time, the White House confirmed that President Obama will support an extension of the first-time homebuyer tax credit beyond November of this year. There appears to be bipartisan support for this to take place.

This is excellent news for the local housing industry. There has been a tremendous amount of movement and competition among buyers over the past several months. Allowing more first-time buyers the opportunity to take advantage of this tax credit into next year will help the local market remain strong. There have been consistent indicators of a housing recovery in our area during the past few months.

8.27.09 Home Prices Rising

There was a 2.9% increase in national home prices from the 2nd quarter of 2009 compared with the 1st quarter, according to the Case-Shiller index. Home sales are being helped due to the government economic stimulus effort, but also due to home prices reaching affordable levels for many buyers. Many buyers are taking action in recent months to try to purchase a home before prices rebound and begin to go up again. There is good momentum in the market right now. However, there could still be problems with a full housing recovery due to the problem of foreclosures, a high unemployment rate, and an influx of bank-owned properties into the market which would increase inventory and put a damper on increasing home prices.

8.21.09 Home Sales Up, So Are Foreclosures

Two recent news articles indicate that while figures on home sales continue to grow, there are an increasing number of American homeowners who are underwater on their mortgages. The number of American homeowners with a mortgage who are behind in their mortgage payments or in foreclosure is 13%. One analyst has predicted that by 2011 nearly half of American homeowners will be underwater on their mortgages, in other words they will owe more on their house than their house is currently worth. This situation is going to exacerbate the problem of foreclosures.
The most recent report on home resales showed a 7.2% increase, the largest monthly increase in at least 10 years. First-time homebuyers continue to create movement in the marketplace as they hurry to close a deal before the November 30th deadline for the first-time homebuyers tax credit.

8.4.09 Pending Home Sales Index Rises

For the fifth straight month, the Pending Home Sales Index created by the National Association of Realtors showed a national increase in June. This index measures signed contracts for previously owned homes. Low prices, good interest rates and the first-time homebuyer tax credit are helping sales. Regionally, the West and South are showing the strongest gains in sales activity. Read more here.

7.27.09 New Home Sales Rise

The news of the day- new home sales rose 11% in June, the largest increase in 8 years. Buyers are taking advantage of lower home prices, low interest rates, and the federal tax credits available to first-time homebuyers. The window of opportunity for this tax credit closes in November, so first-time buyers are flooding the market during the popular summer housing season. Summer is the most convenient time for many families to think about moving. The opinion of some economists is that the worst of the housing recession is behind us.