Stimulus Package & Budget Overhaul
The final stimulus package is the news of the day - the final credit for first time buyers only is $8000. No repayment as long as you own the house for 3 years, and some other limitations apply, but generally this is great news for buyers. Read the details in my blog post here, and a chart comparing the old $7500 credit to the new $8000 credit here. The credit is good for purchases that close before December 1, 2009 (I think Thanksgiving week is going to be very busy with settlements this year.) But remember that time of year has the lowest level of "good" inventory, so don't wait too long to start your search if you're planning to take advantage of the credit.
A lesser known perk in the bill is the reinstatement of the conforming loan limit increase to $729,750 for our area - that means more competitive pricing on loans below that amount.
On the 'bad news' side, Obama's proposed budget includes a provision limiting the mortgage interest deduction for those with an AGI over $200K ($250K for marrieds). Important to watch how this evolves going forward--it will have a huge impact on the affordability of high end properties.
Search for properties online here, or register to attend one of my free first time buyer classes.
Foreclosures & Short Sales in the Washington, DC, Area
Foreclosures and short sales continue to be a huge segment of the properties listed for sale in parts of our area. An interesting study by UVA maintains that the problem is relatively concentrated in certain states and counties, a claim I've long been writing. The study states:
"In the Washington, D.C. metropolitan area, for example, prices have barely changed in the District of Columbia, Alexandria and Arlington County, and parts of Fairfax County in Virginia. The largest price declines (more than 30 percent in 2008) have been in Prince William County, Va., but even there, the range of price declines in its six zip codes ranged from 49 percent to only 6 percent."
Anecdotally I can tell you that I see more and more short sales closing. Banks are getting better at this process and have better incentives to get the deals done. Fannie Mae has even launched a pilot program in Florida and Phoenix, areas particularly crushed by short sales, specifically to speed up the approval process. President Obama's foreclosure prevention package was announced last month, though the jury's out on whether or not it will truly help anyone. As this blogger points out, few homeowners in trouble have enough equity in their property to take advantage of the offer.
This WSJ blog article makes a good point about our local area though: Virginia, being a non-judicial foreclosure state and thus having a quicker timeline to foreclosure than its neighbors MD and DC, may have reached the bottom more quickly and with dramatic price drops, and now is poised for a rebound sooner. It states
"In sum, Northern Virginia's home price "correction" to date has been more severe than Maryland's, but it's now much closer to being over, and home sales are recovering and unsold inventories are dropping sharply. In Maryland, in contrast, reported home price drops have not as yet been as dramatic, but home sales continue to languish and unsold inventories remain bloated."
Thinking of buying a foreclosure? Make sure you know the risks by reading my blog post series here.
Visit my blog to read more news about the DC area market.
Contact me to start your home search in Washington, DC, Arlington, or Alexandria.
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