I may sound like a broken record but much is the same in the Riverside Real Estate Market. Housing sales fell at a record setting rate and home prices declined by double digits for Riverside county last month. In September, Riverside County saw a 53.3% drop in housing sales compared to the same time last year, and prices are 11 % lower. This according to DataQuick Information Systems figures released last week.
Leslie Appleton-Young, the chief economist for the California Association of Realtors, said, "I don't think this is just a one-month phenomenon. I think in the next several months there will be more of the same."
One reason for the sharp decline is a shortage of financing for potential buyers brought on by the recent sub-prime real estate loan market meltdown.
Many sectors are being hurt by the slowing real estate market aside from Realtors and loan officers. From pool cleaners to yard maintenance workers, everyone is feeling the crunch. But that’s not all. Property tax revenues are also being affected by the housing slump which will mean tens of millions of dollars less in funds for county budgets. These budgets cover everything from law enforcement and animal control to parks and recreation and the court system.
For some homesellers, there may be relief on the way. The House Ways and Means Committee voted last week to put forth a bill to remove the tax penalty that sellers face after a foreclosure or a "short sale". Currently, if a seller is foreclosed upon or sells their home thru a “short sale” to avoid foreclosure, the IRS typically treats the canceled debt as taxable income. If passed, bill # H.R. 3648 will go before the Senate and could ultimately eliminate this IRS rule and could be retroactive to January 2007. There is already a similar relief bill already being discussed before the Finance Committee of the Senate.
Help could be on the way soon.
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