To say it's been a tough few years in real estate would be a huge understatement. However in every market there is opportunity to be found and believe it or not people make money in every real estate market. As an example, real estate brokers that handle foreclosure property are experiencing the best years of their careers. Same with brokers that handle short sales. Now, it's a lot more work and it's tough, but nonetheless they are busy. While thinking about these types of things I started to wonder, "What is the good news in real estate?" Here's what I came up with.
Conforming loan limits extended through 2010. The California Association of REALTORS noted the U.S. Congress late yesterday passed a congressional resolution extending through 2010 the current conforming loan limits of $417,000 for most areas in the U.S. and $729,750 for high-cost areas, including many in California. President Obama is expected to sign the resolution today or tomorrow as part of a broader piece of budgetary legislation that will prevent a government shutdown. "There is no doubt that higher loan limits and the federal tax credit for first-time home buyers have helped stabilize California's housing market over the last year," said C.A.R. President James Liptak. "C.A.R. applauds our congressional representatives for their actions to extend the higher loan limits through 2010. They now should focus on making higher loan limits permanent."
C.A.R. calls for extension of federal tax credit. The proposed extension AND expansion of this tax credit includes language that extends the closing deadline for first time buyers from November 30, 2009 to June 30th 2010. A buyer must be under contract by April 30th 2010 and close by June 30, 2010. The new bill also includes a tax credit of up to $6500 for move up buyers that have been in their homes for at least 5 consecutive years over the past 8 years. According to The California Asscociation of REALTORS, nearly 40 percent of first-time buyers said they would not have purchased a home if the federal tax credit for first-time home buyers was not offered. This underscores the significance of the federal tax credit to the housing market's recovery in California.
September sales rise...Median price declines. The California Association of REALTORS reported that September sales were up 2.1 percent to a seasonally adjusted rate of 530,520 units on an annualized basis. The Unsold Inventory Index fell to 4.2 months in September, compared with 6.5 months in September 2008. The index estimates how long it would take to sell off the existing inventory. Fewer listings typically equates to more sales happening faster. The median price of an existing, single-family detached home in California during September 2009 was $296,090, a 7.3 percent decrease from the revised $319,310 median for September 2008, C.A.R. reported. The September 2009 median price rose 1.1 percent compared with August's $292,960 median price.
Economy up, interest rates down. In a recent statement, the Federal Reserve said that financial markets have improved, home sales have increased, household spending seems to be stabilizing and businesses have continued to make progress toward aligning inventory levels with sales. The Fed also said it will keep the benchmark federal funds rate at just zero to 0.25 percent and continue other policies that have helped to support mortgage lending and home sales. "Economic conditions are likely to warrant exceptionally low levels of the federal funds rate for an extended period," the Fed said. A recent loan quote on LendingTree.com listed a 30 year fixed FHA loan of $272,500 at an interest rate of 4.88%, an APR of 5.19%, and a monthly payment of $1556. Good news for borrowers looking at historic rates and terms!