First Time Buyer Tax Credit Extension-- Extended and Expanded!

The $8,000 first-time homebuyer tax credit has been extended until Spring (under contract by April 30th close escrow by June).

Not only has it been extended until the spring it has also been expanded to include buyers who have owned their current residence for at least 5 years looking to purchase a new primary residence for a credit of $6,500.

The income limits have also been raised to $125,000 for individuals and $225,000 for married couples.

The maximum purchase price must be $800,000 or less.

Has the Real Estate Market Turned?

After a positive summer and a successful-to-date fall it looks like the lower priced condos and house are on their way back up.

Summer typically is the best season for real estate in San Diego but summer ended 2 months ago and sales are still being made. The most prevalent change has been in the lower price-range of homes [houses under $350k and condos under $250k]. A year ago you could find tons of houses around San Diego for under $350k--but not anymore. The days of finding a structurally-sound, finance-able house in a safe neighborhood appear to be gone. Houses under $350k, whether bank-owned, short sale or traditional, are in bidding wars often with over 10 offers.
In the past months investors have bought many of the un-financeable properties around town, "flipped" them to suit VA/FHA financing requirements and are reselling them, attracting a desperate buyer pool frantic to qualify for the 1st time buyer tax credit and/or purchase a detached house before houses are no longer a financial option. This is great for our market; formerly trashed houses are being fixed up, more houses are becoming loan-able, owner-occupied buyers are now able to purchase these houses and investors are still making money with a short turn over.
Plans to extend the first time buyer tax credit into Spring are circulating around congress-- what will this mean for the market this Winter? Hopefully good things. We should know in the coming days or weeks all the details of this extension.

If you have any questions please do not hesitate to email me -- adegen@coldwellbanker.com

Jumbo Loan Availability = Jumbo Problem

A study was just released by the National Association of Realtors (NAR) reporting that the limited availablility of jumbo mortgages (loans over $480k) is holding back high-end real estate sales. NAR reports, in today's market, lenders are less likely to loan to jumbo-borrowers even with good credit scores and large downpayments than they are to smaller-scale borrowers with lesser credit and a higher loan-to-value ratio.
Jumbo loans, even to well-qualified buyers, are carrying a much higher interest rate than smaller loans which is leaving ready, willing and able buyers sidelined or resorting to smaller cash-only purchases.
At the top of the market in 2006, jumbo mortgages were at $480billion and now last year (2008) are down to $97billion.
This inavailability of financing is keeping the mid/high-end real estate market from its turn-around.

Meanwhile, while much of the high-end inventory is becoming stale, low-priced homes and condos are selling at record rates. It appears that lower priced condos [under $225k] and houses [under $300k] have hit rock-bottom or are very near, especially in costal areas. Of course, the biggest battle in this price range is the monumental number of short sales, many of which have multiple offers and sometimes an unethical process. Unfortunately, it does not look like short sales will be going away anytime soon.

If you have any questions about short sales or the short sale process please look at my short sale post or email me-- I am here to help.