Currently, one of the most driving forces in the Hemet - San Jacinto Valley Real Estate Market has been first time homebuyers scrambling to take advantage of the $8,000 tax credit (10% of Purchase Price - Max $8,000) that was created as a stimulus to the economy.
In my opinion, the program is very definitely a success. Yes the IRS may be out a few dollars; but look at the trickle down economics that is stimulating local economies. Not only are houses selling quicker than any time during the current housing crises, but new homeowners are spending thousands of dollars fixing these homes so they are habitable with everything from fresh paint, new flooring, revitalizing landscapes and so much more.
It doesn't matter if the new homeowners are the handy do-it-yourselfer or the 10 left thumbs (that would be me) that are better off leaving this type of work to trained professionals.
Truth is, money is being spent and people are working - either in the field or at Home Depot or Lowe's where the supplies and rehab materials are sold locally.
The current $8,000 tax credit has some very specific rules - each knocks out serious segments of the local Hemet - San Jacinto Valley population. In this article, I am highlighting what I believe to be some of the most restrictive guidelines - there are, of course, other guidelines that must be adhered to...just don't have enough room here to cover them all. If you need to know more, contact my office for our free booklet on the subject.
First, the tax credit is strictly for first time buyers - as defined by the IRS which basically means the buyer cannot have had a mortgage interest deduction for the 3 tax years preceding the purchase and credit.
The second qualifying element that plays havoc in this Southern California real estate market is the income levels of the taxpayer. The restrictions for a single homebuyer are $75,000 and if married (regardless of the number of children) the income level doubles to $150,000. Although many people and families in the Hemet - San Jacinto Valley fall into this earnings limit...many more do not.
Of course, the most crippling aspect of the current $8000 tax credit for first time homebuyers is that it is set to expire on November 30th, 2009. This DOES NOT mean you must write an offer and open an escrow by then. No, what it means is that you MUST CLOSE ESCROW no later than November 30th, 2009. Considering that the Average Days in Escrow in July of 2009 for the Hemet - San Jacinto Valley Real Estate market, across the board, was 54 days one can only assume that the rush to enter escrow before the end of September will play havoc on the staffs of escrow offices across the country as they all do everything they can to close as many escrows as they can, as quick as they can. My advise is a first time home buyer in the Hemet - San Jacinto Valley MUST plan on entering escrow before the end of September - anything after will be a nail biter to the very end.
CHANGES HAVE BEEN PROPOSED
There is one proposal before our legislature that would extend the existing program for three (3) years - pretty much as it is. When Congress returns from their Labor Day break, they are expected to give this topic a top priority - even before the dreaded health care debates that have dominated the news cycle recently.
A huge change that is in the bill proposes that the first time home buyer criteria be removed and open the credit up to all American citizens.
There are other bills before both the Congress and the Senate that would modify the current law and give it more teeth so that more Americans can take advantage and do their part in further stimulating the economy.
HR2801, known as the Home Ownership Moves the Economy (HOME) Act will extend the availability of a tax credit through the next year. Perhaps the most significant change would be the income levels that would be increased to $95,000 for single homebuyers and $170,000 for couples who file jointly.
Another bill, S.1230 would extend the tax credit to $15,000. HR 2606 is very similar to HR 2801. Then there is another similar bill, HR 2905 that would seek to extend the same credit found in HR 2801, for an extra year - 2011.
ACT NOW - YOUR CONGRESSMAN IN HOME - STOP IN AND SAY HELLO
Now is a great time to make contact with your elected officials. They are all on a break and most should be home with their constituents. This is when they want to hear from you to help them form their opinions on the important issues facing our government today.
Please don't be bashful - your voice does count if used in a positive manner. One of the most powerful acts any citizen can do is make an appointment at the local office. Go prepared to discuss what is on your mind and share it. Not disrespectfully or demanding...but share how different legislations have effected the quality of your life and how the proposed ones will also effect you - either positively or negatively. It is the faces and human stories that leaders remember. Yes, they are driven by ‘the polls' - but put a face to the numbers.
If you don't know whom your congressperson is or how to reach them, check out this link
Blessings to all who read,
John Occhi, REALTOR®
Hemet - San Jacinto Valley
Servicing THE REO Needs of Asset Managers, Servicers, Banks and Lending Institutions in the Hemet - San Jacinto Valley, Temecula, Murrieta, Winchester, Wildomar, Menifee, Sun Valley, Perris, Moreno Valley, Romoland, Homeland, Nuevo, Banning, Beaumont, Cherry Valley, Yucaipa, Redlands, Mentone, Loma Linda and throughout South West Riverside County and The Pass Areas of The Inland Empire in Southern California. If you are a buyer, investor, first time home buyer or are just interested in REO real estate, please contact us at the above phone number.
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