Atlanta Homes, Buckhead Homes and Real Estate » Housing

Update on the "Stimulus" Bill

Administrator — Sun, 22 Feb 2009 22:11:11 +0000

I know there will be some that view home buyer tax credit as a positive, but I view it as a major disappointment. Part of the recent “stimulus” bill President Obama just signed included a reduced tax credit for first-time home buyers. The amount of the tax credit is the lesser of 10% of the cost of the home or $8000 (Georgia Senator Isakson’s limit was $22,000). This will do zilch to stimulate Buckhead’s, and the surrounding areas like Sandy Springs’ and Dunwoody’s, housing market.

There are some conditions:.
- You must be a first-time home buyer
- The property must be your primary residence
- You are eligible for the entire credit if your adjusted gross income is at or below $75,000 (individually) or $150,000 (filing jointly). If your gross income is between $75,000-95,000 (individually) or $150,000-170,000 (filing jointly), you may not receive the entire credit. Should your adjusted gross income exceed $95,000 (individually) or $170,000 (filing jointly)you are not eligible for this credit.
- You must remain in the home for at least 3 years. If the home is sold within 3 years of the purchase, the entire amount of the credit is recaptured on the sale.

Our own Georgia Senator Johnny Isakson had an amendment for up to a $22,000 tax credit and whether it’s your first, second or third home was irrelevant.

Apparently the possible $22,000 credit was demagogued into a special break for the “rich”; the credit was based on 10% of the purchase price of the home up to $22,000. I don’t know about you, but 10% of a $220,000 house isn’t exactly a special break for the “rich”, especially in Buckhead and metro Atlanta. It seems the new administration is more concerned about a warped perception of socioeconomic fairness than trying to actually stimulate the housing market. It’s going to take more than first time homebuyers in the sub $100,000 range to pull us out of the housing slump. We shouldn’t be particularly concerned about what special class of citizen is doing the purchasing. It might even be a family, with a newborn child, that is buying a larger and more expensive $220,000 home.

Isakson’s amendment was one of the few aspects of the “stimulus” bill that I actually thought might stimulate something.

Stimulation of housing?

Administrator — Sun, 15 Feb 2009 04:55:34 +0000

Here is the latest information from NAR regarding the Economic Stimulus Bill and other legislation impacting real estate:

“The Economic Stimulus Bill (The American Recovery and Reinvestment Act of 2009, H.R. 1.) has been reconciled by the House and Senate. The details of the legislation have not been finalized but we expect the legislation to include a number of important housing provisions, including the remedies for the housing crisis that NAR prescribed at the annual meeting in Orlando, Florida.

Homebuyer Tax Credit – a $7500 tax credit that will be available for qualified purchase of a principal residence by a first time homebuyer between January 1, 2009 and September 1, 2009. The credit does not require repayment. Individuals who purchase in 2009 using financing assistance from state and local mortgage bonds will be permitted to use the credit, as well.

FHA, Fannie and Freddie Loan Limits – Revised loan limits for FHA, Freddie Mac, and Fannie Mae. Specifics have not been released but reports indicate that the 2008 limits have been reinstated for 2009 except in those communities where the 2009 limits are higher. Additional increases in individual communities may also be available at the discretion of the HUD Secretary.

Foreclosure Mitigation & Neighborhood Stabilization – Funding for states and local communities to be used for neighborhood stabilization activities for the redevelopment of abandoned and foreclosed homes are authorized.

These elements of the American Recovery and Reinvestment Act of 2009 are the pillars of the NAR Housing Stimulus Plan presented to the 111th Congress. Additionally we continue to work closely with the Department of Treasury and Secretary Timothy Geithner to implement a mortgage buy-down program.

NAR also recommended that the Treasury Department expand the Term Asset-Backed Loan Facility (TALF) to include commercial mortgage-backed securities as eligible collateral. The Treasury has approved this recommendation and this will encourage investment in the commercial real estate market.

The Economic Stimulus Bill (The American Recovery and Reinvestment Act of 2009, H.R. 1) Additional Housing and Other Provisions of Interest to NAR

Rural Housing Service – Increased funding for the Rural Housing Service direct and guaranteed loan programs.

Low Income Housing Grants – Allow states to trade in a portion of their 2009 low-income housing tax credits for Treasury grants to finance the construction or acquisition and rehabilitation of low-income housing, including those with or without tax credit allocations.

Tax Exempt Housing Bonds – Tax-exempt interest earned on specified state and local bonds issued during 2009 and 2010 will not be subject to the Alternative Minimum Tax (AMT). In addition, financial institutions will have greater capacity to purchase tax-exempt state and local bonds.

Energy Efficient Housing – Grants for energy retrofits for federally assisted housing (section 8), funding for Energy Efficiency & Conservation Block Grants to states, and Increases in the residential tax credit through 2010 for certain energy efficient upgrades.

Transportation – Spending for upgrades and repairs of road, bridges and transit facilities.

Broadband Deployment – Grants to make broadband available in unserved communities

Make no mistake-our work with Congress and the Treasury Department is not yet completed, as the leading advocate for homeowners and the real estate industry, the National Association of REALTORS will continue to address the issues facing Americans who are trying to purchase a new home, protect their current home or preserve investment opportunities in residential and commercial properties.

NAR recognizes the efforts of the members of Congress and the Senate who understand that without a housing recovery, an overall economic recovery is impossible.”

Average Home Prices Up From November

Administrator — Wed, 11 Feb 2009 04:07:11 +0000

IN THE NEWS (Steve Palm of Smart Numbers January 21, 2009): There were 3,431 closings for all single family in December. This is a decline of 20% from December 2007 and more than 3,000 less units from our all-time December record of 6,481 in 2005.

For the year, we had 53,786 closings for all single family or a decline 0f 22.1%. However, when compared to the all-time yearly high of 81,071 closings in 2006 the decline is 33.7%. You would have to go back to 2001 to find less annual closings than we had in 2008.

Single family attached closed 437 units in December. This was a decline of 35% from December 2007, but a significant 57% decline from the December record high in 2005. For the year, single family attached closed 7,794 units or a decline of 28.6% from 2007.

Single family detached closed 2,994 units in December. This was decline of 17% from December 2007 and a 47% decline from the December record high in 2005. For the year, single family detached closed 45,992 units or a decline of 20.9% from 2007.

For the first time since records have been kept, the average sale price for a given year is lower than the previous year for all single family homes. The average price for all single family was $222,893 in 2008 or a decline of 12.3% from 2007 and the last time we had an annual price below 2008’s was in 2002.

About the only bright spot for December was that both single family attached and detached had an average sale price that was higher than November. However, the average sale price for single family attached ($169,632) was still 11.5% lower than December 2007 and the average sale price for single family detached ($208,965) was still 15.4% lower than December 2007.

As expected, we broke another record for expired listings for all single family housing, as 2008 experienced 85,149 expired listings versus 2007’s previous record of 76,490 expired listings. This was also almost 70,000 more expired listings than we had 10 years ago in 1998.

There were actually less withdrawn listings for all single family in 2008 than we had in 2007 (32,869 vs. 33,860).

Days-on-market for all single family was up significantly in 2008 versus 2007, but trended downward the last quarter. DOM was 95.1 for all single family in 2008 versus 88.3 in 2007. However, DOM for December 2008 was 90.9 versus 100.5 for December 2007 and the 3rd consecutive monthly period with a year-to-year decline.

There were 55,000 active listings at the end of 2008 for all single family. This inventory level is 9,000 less than December 2007 and only 4,000 higher than December 2006 levels.

We are finally done with 2008, so what will happen for 2009? I believe resales will have year-to-year monthly increases starting at the end of the 2nd quarter with new construction following two quarters later or the end of the year. How much we improve will depend on how effective our government will be to improve liquidity and the ability to lend for our real estate industry.

If our financial markets fail in the ability to fund and fund all-types (conforming, non-conforming, jumbo, etc) of mortgages, it will be a very slow upward turnaround.