The other day, I mentioned my astonishment at the Housing Affordability and Stimulus Plan and how it really leaves California (the most troubled housing markets in the country) out in the cold.
Then the announcement came regarding an $8,000 tax credit. Forgive me, but whoop-dee-do.
While this may be meaningful in the lower price points, we aren't having trouble there these days. Market time in the under 500,000 range is running around 4 months, and 30 days if it's not a short sale. Clearly, that is a strong seller's market.
Where do we need help? The higher price points are hit hard by tight financing, consumer confidence, and high inventory. And frankly, in those price points, the value of a home could potential fall $8,000 while you are in escrow.
Not to mention, first time buyers that qualify for the tax credit, aren't generally buying in that price point - so I guess that doesn't excite me much.
Most recently, plans were announced to cut mortgage deductions for those in the higher income tax bracket. Now, if you live in Orange County and you are making $208,850 or more, you are living a lifestyle that is a far cry from someone living in the Midwest on the same income.
Example: You may have purchased a home in 2006 that you are affording (barely because your bonus didn't come through this year), and you may have lost 30% of the value since you purchased. Since you are considered part of the 'wealthy' in the country, you are now on the verge of loosing some of your mortgage deduction. You know - the mortgage you've been trying to hand onto, even though you owe more than the house is worth....
I'm waiting for the part of this plan that impacts California. Maybe I wasn't clear last time I mentioned this - one that impacts California in a positive way.
Originally posted on OC Real Estate Voice.