Face it $8,000 didn't make the market take off sufficiently, so let's try $15,000 and let almost everyone qualify! I know, let's throw money at the problem!
Let's get back to the problem, the housing industry was at the center of a horrible mess which turned out affecting not only us(A) but the entire world. Enough said, we have heard all about it. Preserve neighborhoods, prevent foreclosure, short sales, Federal bailouts of toxic mortgages, blah, blah, blah.
Jump starting Seattle's first time home buyer is a great place to start, it creates a ripple up the housing pyramid. The first time home buyer tax credit and possible general tax credit under discussion sounds like it could do wonders. Yippie! Yahoo! for everyone!
Here is my real issue with any tax credit at all... Is it really going to be as effective as it could be? Could have been? Will Be?
First time home buyers will feel great getting an $8,000 tax credit, let alone a $15,000 tax credit. Move up buyers will be the recipient of a bonanza, not needed and unjustifiably.
Let's use a first time home buyer scenario of a $300,000 purchase with a required FHA 3.5% down payment. That would require the buyer to save a minimum of $10,500 (plus lender requirements). That is a lot of money for a lot of people. How nice it would be to have to save $8,000 less and still be a home buyer! That would be cool!
Unfortunately the tax credit money is not being made available for down payment purposes. After all that would be getting us back to the point of creating junk mortgages, toxic assets and put unqualified buyers into homes that they can't afford. After all they don't even have habits sufficient to save enough for a minimal down payment.
Here's a problem with kick starting a first time home buyer boom. Tell Joe Average home buyer to "Quick, save up $10,500 (and more) and you can take advantage of low interest rates and low home prices!" Like that will happen overnight!
All of the issues with allowing the tax credit to apply to the down payment would be better overcome by increasing qualifying standards, lower the ratios of income to expenses, increase credit scores, raise the insurance premium. Basically penalize the borrowers (who don't have enough saved and need to rely on a $8,000 gift) and make them buy less home. There are other ways to get people with low savings into homes while decreasing the risk of default and allowing those with poor savings habits to participate in the home ownership dream.
Alternatively the government could take the $15,000 that they would make available to a larger pool of home buyers and create an insurance pool against defaults for those first time home buyers above. Why in the world would you provide move up buyers or first time home buyers with all of this money? Especially when your goal is to get the housing market moving. Plenty of people will be rewarded, for what? It seems ill thought out and a bit crazy to me. Especially when the simple solution may be.....
First time home buyers are buying more home for a lower price and can therefore enjoy more than they thought possible just a few years ago. They will be happy.
Get the IRS to allow some accommodation for the credit to be used as an advance payable for the deposit.
Provide the $8,000 tax credit to first time home buyers only.
Do get rid of income limits.
Use some of the proposed largess ($15,000) to buy down the interest rates on first time home buyers. Again, lowering the risk of default.
Or, maybe move up buyers deserve something from us also.
More people buying homes, furniture, carpet, upgrades, appliances, roofs, etc. Sounds like employment to me. Something else that we have a dire need for.
I am sure that you can think of other logical, positive, implications or thoughts, of doing things different than coming up with $15,000 for everybody!
Now is the time for all good men (ladies also) to come to the aid of their country! Is that too dramatic? I don't think so. I can still remember May 1977 when my Internet leads dropped by 90% from the previous month. Well, that was just over two years ago. This whole thing has been horrible for America, horrible for all of us.
This is a clarion call for home buyers, home sellers, real estate agents and anyone who wants action NOW. Everyone is being hurt because we are all affected by the crisis in housing. I feel bad, don't you?
Congress has taken baby steps (I know, some of you may think that they shouldn't even have taken these steps) to rejuvenate our industry via a $7,500 First Time Home Buyer credit (repayment required), then an $8,000 first time home buyer tax credit (no repayment required).
Then there was the hope of providing the tax credit and allowing it to be used as part of the required down payment. States and private parties were trying to get into the act of providing the $8,000 in advance. Then the IRS killed the whole thing with their requirements that the rebate only go to the actual person due the rebate.
WHAT A ROLLER COASTER RIDE!Disneyland in a Haunted House!
Senator Johnny Isaacson (GA) introduced a bill to increase the first time home buyer tax credit from $8,000 to $15,000 on Wednesday, June 10th. And the $15,000 tax credit would not be limited to first time home buyers, but could be taken by anyone who buys a primary residence, instead of only by first-time home buyers. The bill would also remove income limits.
This means that, not only first time home buyers, but any home buyer will be able to take advantage of this $15,000 tax credit. How many buyers do you know who have fears of home values continuing to drop, so they continue to wait for the bottom in the housing market? Move up buyers feel poorer when they sell their homes.
Until now I have looked at the $8,000 first time home buyer tax credit as a benefit to help cut the cost of getting into a home. Now I am looking at the $8,000 or $15,000 tax credit as a payment for a decline in home values over the next year. The Government is taking that loss out of play! Imagine what would happen if a year of home buyers didn't lose value in their new homes because they joined a movement in home buying which created faith and optimism in the future! Could that help turn things around?
Sadly, there are obstacles to getting this home buyer tax credit passed into law. More roller coaster.
Yes I make a living in the real estate industry, but that is just how I make a living. That has nothing to do with my opinions on this matter (well, a little more business would feel good and help pay the bills!).
We truly need to contact our Congressional members about passing this bill because it is in America's best interest to take action to preserve our housing stocks value- yours, mine and theirs. Don't leave it up to NAR, NAHB or any other lobby group. Take an action yourself! Contact your elected officials today!
We will feel richer and be in a better mood once the fear of the future is diminished. It is about time that we take control.
Interesting thing is that this didn't start out as a call to action. But that is what we need to do!
One last thought... I wonder if buyers will hold off buying, for the extra cash? I hope not, especially since this may never come to fruition given the governments track record. Will you be able to close by the Cinderella date? Will interest rates continue to climb?
Rising rates are like a thief, they steal from you every month, month in month out. On a $300,000 mortgage a 1% rise in interest rates will cost you $183 per month more ($11,000 over 5 years).
What a roller coaster ride this has been. Hopes rise and are dashed, maybe, leaving a trail of questions in everyone's mind.
Below is a quote from the Washington Housing Finance Commission website. Posted on 06/11/2009.And it is terminal, as regards a cash advance from the State and possibly any third party who may have been putting together programs to advance the tax credit to the first time home buyer (I did come across one entrepreneur who had devised such a plan).
The latest status report on the $8,000 looks like this, today. FHA still requires 3.5% down payment. If you can get an advance it cannot be used to defray the need for 3.5% down. It can of course be used as an additional down payment or to pay closing costs (possibly even to buy down your interest rate). Freddie and Fannie will undoubtedly follow FHA's position.
Just an opinion..... I can certainly understand the issues of many people about requiring a minimum down payment and not using the $8,000 as an advance applicable to the required down payment. Don't want to step into that NO MONEY DOWN pile again. The real problem would seem, to me, how do we solve the housing crisis. How long does it take most of Seattle's first time home buyers to save the 3.5% for a down payment? It takes me some time, how about you?
Minimum down payments can be factored into the qualification criteria and mortgage interest rate. There are ways to account for the risk involved with a minimum down payment and delinquency rates.
While DC fiddles, the country burns. Have you seen what is happening to interest rates lately? Up significantly. This means an additional hardship on Seattle's first time home buyers and buyers in general. So you have down payment issues slowing the market and affordability (which is actually at a all time low, I hear, Seattle Housing affordability, $8,000 first time homebuyer tax credit, low interest rates- The perfect storm? coming together in an untimely scenario.
In my mind, it seems an odd way to solve the biggest crisis we have ever seen.
Thank you for visiting the WSHFC website for information regarding the $8,000 First-Time Homebuyer Tax Credit.
The Commission previously noted it was involved in discussions with the IRS and other interested parties concerning the development of a Tax Credit bridge loan program.
To guarantee repayment of a Tax Credit bridge loan the Commission requested the IRS approve an advance assignment of the tax credit refund. If approved, the homebuyers $8,000 tax credit refund would be directly deposited into a state-owned account or mailed directly to the loan servicer for immediate payoff of the Tax Credit bridge loan.
On June 2, 2009 the IRS formally declined this request citing long-standing regulations that require refunds be paid only to the person or persons filing the tax return. Due to financial risks associated with the Tax Credit bridge loan program and because the Commission already offers numerous down payment assistance programs, the Commission has discontinued the development of an additional Tax Credit Bridge Loan program.
The Commission offers statewide down payment assistance programs for first-time homebuyers needing assistance with a down payment and/or closing costs. For information about House Key Plus down payment assistance (up to $10,000 in assistance) and the Commission’s other programs, please visit the Commission’s down payment assistance page or contact a Commission-trained loan officer to ask about getting pre-approved for the House Key First mortgage loan with down payment assistance."
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It had something to do with "Think Local". Our Seattle WA and surrounding communities markets never did take off with the same exuberance as did many other markets. And our landing will not be anywhere near what is happening in many other cities.
So why are so many would be buyers waiting for prices to drop?
It is really about buying a home, a place to live, the community and schools. It is about getting on with life. We have been focusing too much on a home as a piggy bank, rellying too much on price increases to fund our consumer needs. When is the last time you heard of a mortgage burning party? Probably the younger buyers are saying "a what?". Yes people did really pay off their mortgages and party.
Did you hear, home prices in Seattle WA are beginning to rise!
You may have heard recently that prices dropped a whopping 1.3-1.7%~ last year. For those of you who held off buying that represents about $6,158 drop in the median Seattle WA home price. That is a monthly savings of $37, about 10 Starbucks coffee drinks. About 2.5 coffe drinks per week or almost one movie ticket per week (no popcorn though). Or about 1.75 gallons of gas per week. Stop me when this begins to sound like a silly reason to hold out on your home buying dreams.
And a whole industry held it's breath with you.
I have heard that something like 25-30% of real estate agents have dropped out of the business. That's actually great for the rest of us and for you. They say that about 72% of buyers and sellers choose the first agent they come across. Imagine, you could have had a one in three or four chance of selecting an agent who probably shouldn't have been in the business anyhow. Hmmmm..... maybe you will give me a call now!
Here are the most recent numbers:
The median price for a single family home that sold in King County last month was $439,900. That's down about 3.3 percent from a year ago, but up $10,000 (2.3 percent) from February! Have we turned a corner? Are we about to? February 2007 to February 2008 is down in volume by 35%. Must be the latee saving people stopped buying real estate. Oh, come on. Play with me!
And peak home buying season is hitting the Seattle WA market!
The current market offers great opportunity for homebuyers. Prices are holding up and there is less competition, at this time. As spring progresses the market typically picks up and with interest rates at today's low rates there should be a real rush in the offing.
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Waiting for the next shoe to drop has been interesting. First it was announced that changes were in the wind, but of course the had to be approved by both houses and signed into law by Presidential approval. That was done. Various announcements were made public and Conventional loan amounts were increased. U.S. regulators removed limits on the combined $1.5 trillion mortgage portfolios of Fannie Mae and Freddie Mac, enabling the companies to increase financing for the slumping housing market.
Who knew that all of this was going on in the background, who cared? We just want to get on with life as soon as possible. Tired of holding our breath on the upcoming refinance. When? When?
Well, we are actually getting closer. It appears that the issue may be that lenders are interpreting the mortgage guidelines and I have heard that there is some sort of meeting, within Wells Fargo, set for March 17th and it sounds like this is to discuss these new program requirements.
Keeping in mind that the legislation is set to be only a short term increase, expiring at the end of 2008 and was put together to resolve liquidity issues in the mortgage and real estate markets. Yes the clock is ticking and we need to get our refinance and purchase activities set into high gear. It sounds like there is still a cap of $417,000, and a charge for anything up to the new limit.
For King, Pierce and Snohomish Counties the maximum mortgage amount will now be $567,500! That's wonderful for you borrowers who have been paying Jumbo mortgage prices in King County WA! Your rates can now drop down to the new conforming loan limits.
I will post the results of the March 17th meeting as soon as I understand what comes next.
Contact me at 206-898-3776 in order to get set for participating in a stampede of Jumbo mortgage refinances. I also work with homebuyers who can buy a home through me and get a reduction on their mortgage costs.
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Why do I keep talking about sound financial decisions- when you are thinking of a home buying decision!
If you notice the tone of many of my articles you will note that I am a firm believer in viewing your home purchase or investment in rental real estate as one of the most significant financial decisions you will ever make. Yes, your home is your castle. Yes, it can turn into the family home of childhood memories. And yes, it can end up as one of the biggest assets in your retirement portfolio...... Read the article at www.realtyandamortgage/blog
Buying a home, or investment property, is a great way to build long-term wealth.
But there are some other important dividends, too.
Procrastinating Buyers may loose …. Procrastinated Sellers may have lost something.
Homes are, in fact a great investment today. On average, the value of a home, your home or investment property, nearly doubles every 10 years.
So, this is the first of about five articles. Stay tuned….Next on the agenda is:
The average home owner has 36 times the wealth of the average renter!
The facts of the Seattle real estate market.
Increased inventory benefits YOU, TODAY!
Mortgage interest rates
Increased mortgage restrictions and what does it mean to you?
What’s happening with vacancy rates and how can you benefit?
The impact of increased foreclosures can benefit you! Find out how!
Visit www.realtyandamortgage.com today to learn how we can work together to help YOU create you future wealth, while receiving thousands of dollars in savings on your purchase AND potentially an interest rate 3/4% below current market rates!
Visit www.dicktodhunter.com to view current listings. This is a great site which will email you listing updates based on your search criteria.
Call me today at 206-898-3776 or email at dick@thesoundteam.com
Serving South King county WA, South Seattle Washington, Renton WA, Kent WA, West Seattle WA, Rainier Valley WA, Burien WA, Federal Way WA, Bellevue WA
Commercial real estate in the Seattle Washington real estate market represents a tremendous opportunity.Let's start with a bit of background information:
Seattle makes news Excerpted from a Seattle PI article. "The Seattle area has the second-hottest commercial real estate market in the United States.....
Seattle is also a standout market for investors, receiving top or near top "buy" ratings for all property sectors.....
Seattle, it has a highly diversified economy. Seattle is also the highest-rated metro area for home building.....
I provide my clients with an excellent financial report and analysis of their future investments. With these analysis you can:
clearly understand the financial impact of your investment decisions
and help structure a logical offer which can be used to demonstrate the validity of your purchase offer or
if selling, demonstrate clearly the value of your property
I particularly enjoy working with multi-family properties (to any size).
All of my experience in management, rehabilitating properties, investing in real estate, real estate investment analysis and understanding the results and financing are available to you, my client. Let's make better investment decisions!
The areas surrounding Seattle, Washington are a special place. This area has won numerous "best places to live" awards.
As a service, RentonVideoTour.com has put together this web site filled with valuable information to help answer questions for both home-buyers and sellers. You can view Renton's largest area photo gallery. You can watch Renton Video Tour or view area videos that include neighboring communities. You can also search for homes.
For more information on Kent, or surrounding communities visit The Sound Team of Keller Williams website and RealtyAndAMortgage.com and for a bit of my personality, experience and capabilities visit RealtyAndAMortgage.com/blog.
The areas surrounding Seattle, Washington are a special place. This area has won numerous "best places to live" awards.
As a service, KentVideoTour.com has put together this web site filled with valuable information to help answer questions for both home-buyers and sellers. You can view Kent's largest area photo gallery. For a Kent video tour, click here....You can watch area videos that include neighboring communities. You can also search for homes.
For more information on Kent, or surrounding communities visit The Sound Team of Keller Williams website and RealtyAndAMortgage.com and for a bit of my personality, experience and capabilities visit RealtyAndAMortgage.com/blog.
Disclaimer: ActiveRain Corp. does not necessarily endorse the real estate agents, loan officers and brokers listed on this site. These real estate profiles, blogs and blog entries are provided here as a courtesy to our visitors to help them make an informed decision when buying or selling a house. ActiveRain Corp. takes no responsibility for the content in these profiles, that are written by the members of this community.
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