The Hits Keep on Comin'

By
Real Estate Agent with M Realty

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.istock_000001823153xsmall

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.

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Topic:
ActiveRain Community
Location:
California
Groups:
Everything California
Orange County Real Estate
Tags:
tax credit
mortgage deduction
stimulus plan

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Rainmaker
300,475
Heather the Realtor Orlando, Lake Mary
LemonTree Realty - Orlando, FL
First Time Home Buyers, Bank Owned Homes

I never thought of that, that people in cali easily make over $250k but that doesnt mean as much as it does with someone in Michigan making that money yet you guys are penalized.

Feb 28, 2009 05:05 AM #1
Rainmaker
1,475,505
Donna Harris
Donna Homes, powered by JPAR - TexasRealEstateMediationServices.com - Austin, TX
Realtor,Mediator,Ombudsman,Property Tax Arbitrator

$8k is still a lot of money, and why should only first time home owners get that money?  Others, who are buying their second or fifth house should also get some kind of benefit, especially if you're going to reduce the tax benefit of the interest paid.

It's no wonder the approval rating has already gone from 12% to 24% in only a month...

Feb 28, 2009 05:10 AM #2
Rainmaker
2,502,697
Charles Stallions
Charles Stallions Real Estate Services - Pensacola, FL
800-309-3414 - Pensacola, Pace or Gulf Breeze, Fl.

I wonder if the $8000. will be taxed the next year as income or what? I found out today that the $600. from last year is according to my accountant.

Feb 28, 2009 05:49 AM #3
Rainmaker
777,818
Michael A. Caruso
Surterre Properties - Laguna Niguel, CA

Hi Linsey,

It's certainly a frustrating situation...I'm glad for your post because many people do not realize the situation California residents are in...

Michael

(Not far from you in Irvine, CA) :)

949.753.7900

Feb 28, 2009 05:54 AM #4
Rainer
129,115
Justin Ukaoma
Vizion KC - Kansas City, MO
Kansas City Real Estate Investments

Well while the $8k does help us out in my area I can very clearly see why your frustated.  I'm sure $200k goes a lot further out here than it does on the coast.

Feb 28, 2009 01:24 PM #5
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Rainer
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Linsey Ehle

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