California Real Estate Sales

As we predicted, today November 6, 2009  President Obama  signed an extention of the home buyer’s tax credit with a significant expansion.

Click Here for a quick matrix showing the differences.

Let  me quickly summarize some of the these changes for you now:

• First, the expiration date for the credit will move to April 30, 2010.
• First-time buyers who have not had interest in a principle residence for the last three  years are  eligible at the maximum amount of $8,000 for  married couples, $4,000 for those filing separately.
• Current homeowners, who have consecutively maintained their home  as their primary residence for five of the last eight years, are also eligible. However, the maximum amount for those homeowners is $6,500 for  married couples and $3,200 for those filing separately. Starts November 7, 2009
• The tax credit may not used to purchase a home for more than $800,000.
• All  buyers who want to get the credit must include documentation of the purchase on their tax returns.
• The income limits for both tax credits have been raised to $125,000 for single  buyers and $225,000 for married couples.

Thank you for your continued referals and if you have questions or you’d like me to represent you in the sale or purchase of your next home please contact me here.

Lee Williams

(310) 882-5428

LeeWilliams@KW.com

Standard & Poor’s/Case-Shiller index rises 1% in August from July in its third consecutive monthly gain. Southern California cities, led by L.A. and San Diego, show notable increases.

By Alejandro Lazo

The nation’s biggest cities are posting steady gains in home prices, a closely followed index showed Tuesday, adding fresh evidence that the U.S. housing market is stirring to life.

But economists are divided over whether the recent improvement is the result of temporary federal policies or a sign that homes have gotten cheap enough to spur a lasting recovery.

Home prices in 20 metropolitan areas rose 1% in August from the month before, according to the Standard & Poor’s/Case-Shiller index released Tuesday. The index has posted three consecutive month-to-month gains, bringing home prices in August to pre-bubble levels of autumn 2003. The price index is down 30% from its May 2006 peak.

“We are seeing stabilization,” said Patrick Newport, an economist with IHS Global Insight.

A variety of federal policies has contributed to the steadying of home prices. The federal government has offered an $8,000 tax credit for first-time buyers. Interest rates on mortgages have hit their lowest levels in years as a result of the Federal Reserve’s campaign to keep credit flowing throughout the economy. And a dreaded wave of foreclosures appears to have been averted as banks responded to government pressure to work with borrowers facing foreclosure.

What remains uncertain is where the housing market will go if these policies ease.

Michael D. Larson, an interest rate and real estate analyst for Weiss Research, said he expects the real estate market to stumble with the expiration of the tax credit at the end of November.

Still, he said, relatively low prices will continue to spur demand (Read Full LA Times Article)

Some want to expand the tax credit for homebuyers. Supporters say it could stem price declines. Critics say it would just be a costly, temporary fix.

NEW YORK (CNNMoney.com, Author Jeanne Sahadi) — Congress is considering proposals to greatly expand a soon-to-expire $8,000 tax credit for first-time homebuyers — potentially applying it to all but the wealthiest homebuyers.

Supporters say doing so would further boost home sales, stabilize housing prices and generate jobs. Opponents say extending and expanding the credit would be a waste of money and only temporarily stave off further price declines.

The credit now can be claimed by anyone buying a home who has not owned one for three years and who closes the deal by Nov. 30.

Beyond extending that deadline, some lawmakers want to make the credit available to all homebuyers who meet income eligibility requirements. And some want to increase the amount of the credit from $8,000 to $15,000.

Currently the first-time home buyer credit is available in full to those buying their primary residence who make $75,000 or less ($150,000 for joint filers). A partial credit is available to those making between $75,000 and $95,000 ($150,000 to $170,000 for joint filers).

The case for expanding the credit
Through mid-September, 1.4 million tax returns had qualified for the credit, according to the IRS.

Some portion of those returns, which the IRS couldn’t specify, represents buyers who took advantage of an earlier version of the tax credit, which was only worth $7,500 and has to be repaid over time.

By the end of November, the credit will have been used by 1.8 million homebuyers, at least 355,000 of whom would not have bought a house without the tax break, according to estimates by the National Association of Realtors.

Mark Zandi, chief economist of MoodysEconomy.com, favors extending the current credit until June 1, 2010, and making it available to all home buyers regardless of income or at least to everyone except those at the highest end of the income scale. He estimates the cost of doing so wouldn’t exceed $30 billion over 10 years.

Zandi’s reasoning: Foreclosures are expected to rise next year because of rising unemployment, and that will drag home prices down further. Extending and expanding the credit will help mute that decline. And by June, there’s a chance the job market will have stabilized.

“The most fundamental argument for the credit is that nothing works in the economy if housing is falling — it hurts household wealth and credit becomes tight,” Zandi said. “[The credit] is a good insurance policy. It’s vital to stem the housing price declines.”

To kick start economic activity, Zandi believes lawmakers should set aside an amount of money for an extended credit and tell potential home buyers “first come first served.”

The National Association of Home Builders would like the credit extended for all of 2010.

Read Full Article at CNNMoney.com

As part of its plan to stimulate the U.S. housing market and address the economic challenges facing our nation, Congress has passed legislation that grants a tax credit of up to $8,000 to first-time home buyers.

Here is more information about how the 2009 First-Time Home Buyer Tax Credit can help prospective home buyers become part of the American dream.

CLICK HERE