- Weak Demand:
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Portland Ranked #1 “Green City” in the U.S.
A study conducted by the Business Courier of Cincinnati
reported that
For further information, click on the chart to be redirected to the Business Courier website.
Metro Green Index
Are Green homes before their time?
More Doctors Smoke Camels... More Than Any Other Cigarette
I Wonder What They Would Think About Green Homes?
It wasn’t that long ago, just 50-60 years or so, that there were doctors on television promoting cigarette smoking. The video below is a t.v. commercial that ran in 1949. The spokesperson boldly states that “doctors in all branches of medicine and doctors from all parts of the country prefer Camel…”
An online resource of tobacco facts states:
“About 10 million people in the United States have died from causes attributed to smoking since the first Surgeon General's report on smoking and health in 1964--2 million of these deaths were the result of lung cancer alone.”
Yet, there are millions of people that continue to smoke.
Is it any wonder then that whenever we discover something new or better many of us search for reasons to hold on to the old. We enjoy our way of life and we resist change even when we know it may harm us or cost us in some way.
Now fast-forward to 2009 and consider the features and benefits of green homes. We now know that there are countless harmful toxins and pollutants in many of the materials used to build our homes. We also know that the air inside the average home is more polluted than the air outside.
According to the USGBC, homes and buildings consume approximately 72% of all electricity, 40% of primary energy use and produce 39% of all carbon emissions in the U.S.
Green homes and buildings significantly reduce energy use (25% - 50%), reduce carbon emissions (33% - 39%), use less water (40%) and produce less solid waste (70%) than non green homes.
In sum, we know green homes are healthier, more comfortable and cost less to operate! So what’s up? What is the delay? Why are we not demanding more green homes?
Personally, I think the answers are hidden in the habitual nature of our conditioned patterns of behavior. It took many years for collective public awareness about cigarettes to take hold. It may take us a while to catch on to the issues around green homes.
I know we’ll get there eventually--better sooner than later as far as I am concerned.
I can't help but wonder what future generations will think when they look back at us on the future equivalent of YouTube?
What will the Portland housing market do in 2010?
What will the Portland housing market do in 2010?
1. The Portland housing market has stabilized, as evidenced by the leveling of sale prices and the generally balanced inventory.
2. That stability is fragile. Several threats remain:
Continued high unemployment means fewer qualified buyers, fear of buying amongst those who are qualified, and a general lack of urgency by the buying public. There are a lot of potential buyers waiting for the day they are certain values won’t drop further.
- Mortgage Availability:
The Federal government is scheduled to stop its bailout buying of mortgage-backed securities after March 2010. Without a fluid secondary market, loan originators won’t be able to cash out new loans, and will make fewer new loans at higher cost to borrowers. I have a strong hunch that the Feds will continue this intervention if the secondary market hasn’t started to heal itself by then.
- Interest Rates:
Some economists think 30 year fixed rates will rise close to 7% this year. They’ve said that many times over the past few years. This time I think they’ll be close to right. Perversely, the threat of rising rates will stimulate buying in the short-term, as it has done many times before.
- Employment-Related Distressed Property Sellers:
No job, no money to pay the bank. Have job, keep the home. ‘Nuf said.
- Elective, “Walk Away” Under Water Owners:
Reports are circulating of people who, though able to pay their mortgage, choose to abandon their homes on the theory that they’ll recover faster financially without the house than waiting for the house to recover its value. Credible estimates exist that the likelihood of homeowners doing this increases dramatically when their homes’ value dips below 75% of the secured indebtedness. My hunch is that we’ll hear a lot of these stories from other parts of the country, but that the Portland real estate market won’t be affected much.
- The “Shadow Inventory”:
No this is not a Marvel comic book character. Anecdotal reports are increasing that banks have a huge supply of distressed homes, either about to be taken back, taken back, or foreclosed upon, that will be dropped on the market any day, and that such a flood will sink property values further. No doubt this exists, but it doesn’t become larger by repetition. Nobody has been able to give a good estimate of this shadow inventory’s size, or how it will be managed, so its hard to know if it will matter or not. Even if the number is as large as some speculate, one would think the banks would trickle the properties onto the market over time. Imagine Bill Gates selling all his shares in Microsoft: it would be done slowly. Nonetheless, bank-owned or controlled properties will be added to the supply of active listings for a long time to come, thereby putting some downward pressure on prices. It’s just impossible to tell how much.
- Expiration of the First-Time Homebuyer Tax Credit:
I mentioned earlier that I did not think the credit was affecting the Portland housing market as much as the media has reported, so I don’t think its expiration will matter much, either. That said, the credit is a real bonus to an eligible buyer, so best get on the stick if you hope to take advantage of it.
3. So what will the Portland housing market do in 2010?
- Unemployment will fall slowly but steadily throughout the year.
- Interest rates will remain low for most of the year, but finally start creeping up as the economic recovery gains traction and the markets respond.
- Portland median home prices will remain flat for several months, with a slight upswing later in the year. Monthly fluctuations will occur, but the overall trend will be fairly stable.
- Several Portland sub-markets that have been excessively discounted (Forest Heights and parts of West Portland, for instance) will rebound towards the overall Metro Portland trends, giving the appearance of a spike in activity and prices. Of course, if your home is one that sells quickly for more than you expected, this correction will be more than just an appearance!
- Several sub-markets (Lake Oswego for instance) that have resisted price adjustments will show either price drops or excessive standing inventory (again).
- The Oregonian will report a lot of meaningless statistics, and will announce the housing recovery three months late.
- Many buyers will look back at the bottom of the market and wish they had bought earlier in the year.
Expanded Tax Credit is Good News for First Time and Repeat Home Buyers Alike!
Expanded Tax Credit is Good News for First Time and Repeat Home Buyers Alike!
Home sellers and potential buyers nation wide welcomed the recent news that Congress had decided to extend and greatly expand the Home Buyer's tax credit in an attempt to further stimulate the economy. Not only does the new legislation extend the existing first time buyer's credit until mid-next year, but it also creates a tax credit for qualified repeat buyers. The change in legislation will relieve home buyers scrambling to meet the original deadline and may encourage a wider range of buyers to consider purchasing a residence.
What Has Changed with the New Law?
Deadline:Whereas the original tax credit was set to expire on December 1st, buyers now have additional time to find their dream home! Buyers must have a contract to purchase a residence in place before May 1 2010, and the deal must close before July 1, 2010 in order to take advantage of the tax credits. At this stage, no additional extensions are anticipated.
Sale Price Limit: A ceiling has now been set for the sales price of homes eligible for the tax credit. For purchases made after Nov. 6, the tax credit is only available for any homes costing less than $800,000.
$6,500 Credit for Repeat Buyers: Homeowners considering a new home purchase may now be eligible for their own tax credit.Taxpayers who have lived in the same residence for five consecutive years out of the past eight can now qualify for a tax credit of as much as 10% of the purchase price of a new principal residence (up to a maximum $6,500). The new residence need not be a single-family home, and there is no requirement that the new residence must cost more than the previous residence. Note: the credit for repeat buyers does not apply to homes purchased prior to November 6th of this year.
More Accommodating Income Requirements: The tax credit was designed to phase out based on income levels, meaning the amount of the tax credit decreases as the filer's income approaches the maximum limit. Under the previous format, income restrictions called for the tax credit to begin phasing out for individuals making $75,000annually, (modified adjusted gross income*), with no credit available to individuals making $95,000 or more. For married couples filing jointly, this"phasing out" range was $150,000 - $170,000 under the previous law.The income limits set within the new law are far more liberal. For single filers, the credits now begin phasing out at $125,000 up to $145,000 of modified adjusted gross income. For married couples filing jointly, the range begins at$225,000 and ends at $245,000.
The existing phase-out ranges of $75,000 to$95,000 or $150,000 to $170,000 for joint filers still apply to purchases on or before Nov. 6, 2009.
(*For most people, modified adjusted gross income will be the same as adjusted gross income.)
Anti-Abuse Measures: The new law contains anti-abuse measures designed to address and prevent fraudulent applications for the home-buyer tax credit.Persons who are under the age of 18 or who are claimed as dependents by other taxpayers will not be qualified for the tax credit program. Taxpayers taking the credit will also have to furnish proof of purchase. After filling out IRS Form 5405 to determine their tax credit amount, buyers must attach a copy of their HUD-1 settlement form (i.e. closing statement) as proof of the completed home purchase.
Additional Limitations on Buyer-Seller Relationship: Under the previous law,buyers were not eligible for the tax credit when purchasing a home from a lineal ancestor or descendant. The new law applying to purchases made after Nov. 6 also prohibits buyers from taking the credit if the home is purchased from a spouse or the spouse's lineal relatives.
What Aspects of the Original Credit Remain?
Up to $8,000 Credit for New Buyers: First-time home buyers remain eligible for a credit of as much as 10% of the purchase price of a new principal residence, up to a maximum$8,000. "First-time" is still defined as buyers who haven't owned a principal residence for a three year period prior to the home purchase(including both partners of a married couple).
Three Year "Principle Residence" Window:Neither the New Home Buyer Credit nor the Repeat Home Buyer Credit needs to be repaid provided that the buyer(s) reside in the home for a period of three years following the purchase. If within 36 months of the date of purchase the property is no longer used as the taxpayer's principal residence, the tax payer is required to repay the credit. Repayment of the full amount of the credit must be included with the income tax return for the year in which the home ceased tobe the taxpayer's principal residence. The full amount of the credit is reflected as additional tax on that year's tax return.
Tax Credit <> Not Deduction: The credits offer a refundable dollar-for-dollar reduction in what the taxpayer owes. For example, a taxpayer who owes $10,000 and qualifies for the full $8,000 tax credit would only owe the IRS $2,000. This offers a greater savings than a tax deduction.
The term "refundable" means that either of the home buyer credits can be claimed even if the taxpayer has little to no federal income tax liability to offset. If the qualifying credit exceeds the taxpayer's liability, the government would refund the excess portion of the tax credit. For example, if you qualify for an $8,000 credit but only owe $5,000 in tax, you could receive a $3,000 check from the Internal Revenue Service.
Tax Return Filing Options: 2009 home buyers may claim the credit on either their 2008or 2009 returns, while 2010 buyers can claim the credit on either their 2009 or2010 returns.
Joe Fustolo
Owner, Partner, Broker
503-789-1124 Mobile
www.PortlandRealEstateCoach.com
Tax Credit Extension???
$8,000 home credit still in play
Negotiations about whether and how to extend and expand the tax credit for homebuyers are moving quickly. Here are the latest developments.
NEW YORK (CNNMoney.com) -- Confused about whether lawmakers will extend the $8,000 first-time homebuyer credit and what it would look like?
That's understandable, since the situation is still very fluid.
Here's where things stand.
Support for the credit: There is still bipartisan support in Congress for extending the credit past Nov. 30 and making it available to more homebuyers.
Some of the issues still in play: Just how far past Nov. 30, the size of credit and how many more buyers would qualify.
It's still not clear where President Obama stands on the issue. Last week, Housing Secretary Shaun Donovan said the administration wanted to review more data to better assess the cost of the credit before weighing in.
What's on the table now: There appears to be movement toward a compromise deal that falls between the most and least generous proposals that have been put forth so far.
"There is bipartisan compromise to extend the credit through spring and expand it to existing homeowners who are stepping up to a different home," financial policy analyst Jaret Seiberg wrote in a research note for Concept Capital's Research Group.
The latest idea under discussion is a credit worth up to $8,000 for first-time homebuyers and up to $6,500 for homeowners looking to trade up to a bigger primary residence and who have already lived in their current home for five years. (CNN: Senate compromise may be in the works.)
To qualify for the full credit, however, homebuyers must have adjusted gross income of less than $125,000 ($225,000 for married couples filing jointly).
In addition, the credit would only apply to homes sold for $800,000 or less. Contracts to buy a home must be signed by April 30, 2010, and the deals must close by June 30 in order for a buyer to qualify for the credit.
Rationale for extending the credit: Supporters of the credit say it has helped to boost existing home sales in recent months. Extending the credit would help further support sales, stabilize housing prices and generate jobs in the face of an expected rise in foreclosures next year, which is expected to put downward pressure on prices.
If the credit is allowed to expire, they say, the housing market and the broader economy will grow moribund again.
"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," said Mark Zandi, chief economist at Moody's Economy.com. "[The credit] is a good insurance policy. It's vital to stem the housing price declines."
What critics say: Though extending the credit has bipartisan support, it is not without its critics.
Critics, while acknowledging that the credit has helped to generate additional home sales, say it has been poorly targeted and therefore not cost-effective.
They point to estimates that only 10% to 20% of the nearly 2 million homebuyers who will have gotten the credit by Nov. 30 bought solely because of the tax break.
In other words, a large majority of homebuyers who benefited from the credit would have bought their homes without it.
By one economist's estimate, the government may have spent $43,000 for each sale that occurred strictly because of the credit.
In a position paper published this week, the liberal Center on Budget and Policy Priorities said making the credit available to existing homeowners would not help stabilize housing prices or reduce inventory.
"When [they] purchase a new home, they simultaneously put their current home up for sale. As a result, there is no net effect on supply or demand in the housing market."
Timing on a vote: An amendment to extend and expand the credit could be attached to a bill that would extend unemployment benefits and which could pass the Senate as early as this week.
However, there's a chance the housing credit will be dealt with separately.
It could be attached to another piece of legislation or put in a standalone bill
with other proposals to extend tax breaks. 
Absorption Rate
Absorption Rate
Sellers often only look at the price for which other homes in their
area sold and how long it took the homes to sell. What is missing from
this view is putting it in context with the current market. This is why
I use Absorption Rate.
Absorption Rate shows that at the current
rate of sales how long it would take for all of the homes for sale to
be sold. This gives a much more accurate view of the time it may take
for a home to sell. This is usually applied to a subdivision.
Absorption
Rate is calculated by taking the number of homes sold in the last 6
months, dividing it by 6 (for 6 months) to determine the average number
of homes sold per month. Then take this number and divide it into the
number of homes for sale.
An example would be that over the last
six months there were 10 homes sold in the subdivision of Millard
Heights and there are currently 5 homes for sale in the subdivision.
Thus there is a 3 month supply of homes for sale in Millard Heights. In
other words at the current rate of sales it would take 3 months for the
homes that are currently for sale to be sold or absorbed into the
market. That is assuming that no new homes come on the market.
The math for this example looks like this:
10 homes sold / 6 months = 1.66 homes sold per month
5 homes for sale / 1.66 homes sold per month = 3 month supply
I show this to clients as follows:
# of Homes for Sale | 5 |
# of Homes Sold in the last Six Months | 10 |
Absorption Rate in Months | 3 |
<< MORE >>
Okay..... gimme the fine print of the $8,000 Buyer Tax Credit.
FrequentlyAsked Questions: FirstTime Home Buyer Tax Credit of $8,000 1. Whois eligible to claim the tax credit? 2. Whatis the definition of a first-time home buyer? 3. Howis the amount of the tax credit determined? 4. Arethere any income limits for claiming the tax credit? 5. Whatis "modified adjusted gross income"? 6. If mymodified adjusted gross income (MAGI) is above the limit, do I qualify for anytax credit? 7. Canyou give me an example of how the partial tax credit is determined? 8. Howis this home buyer tax credit different from the tax credit that Congressenacted in July of 2008? 9. Howdo I claim the tax credit? Do I need to complete a form or application? 10. Whattypes of homes will qualify for the tax credit? 11. I read that the tax credit is"refundable." What does that mean? 12. I purchased a home in early 2009 and havealready filed to receive the $7,500 tax credit on my 2008 tax returns. How canI claim the new $8,000 tax credit instead? 13. Insteadof buying a new home from a home builder, I hired a contractor to construct ahome on a lot that I already own. Do I still qualify for the tax credit? 14. Can Iclaim the tax credit if I finance the purchase of my home under a mortgagerevenue bond (MR 15. Ilive in the 16. I amnot a 17. Is atax credit the same as a tax deduction? 18. Ibought a home in 2008. Do I qualify for this credit? 19. Isthere any way for a home buyer to access the money allocable to the creditsooner than waiting to file their 2009 tax return? 20. IfI’m qualified for the tax credit and buy a home in 2009, can I apply the taxcredit against my 2008 tax return? 21. For ahome purchase in 2009, can I choose whether to treat the purchase as occurringin 2008 or 2009, depending on in which year my credit amount is the largest?
First-timehome buyers purchasing any kind of home—new or resale—are eligible for the taxcredit. To qualify for the tax credit, a home purchase must occur on or afterJanuary 1, 2009 and before December 1, 2009. For the purposes of the taxcredit, the purchase date is the date when closing occurs and the title to theproperty transfers to the home owner.
Thelaw defines "first-time home buyer" as a buyer who has not owned aprincipal residence during the three-year period prior to the purchase. Formarried taxpayers, the law tests the homeownership history of both the homebuyer and his/her spouse.
Forexample, if you have not owned a home in the past three years but your spousehas owned a principal residence, neither you nor your spouse qualifies for thefirst-time home buyer tax credit. However, unmarried joint purchasers mayallocate the credit amount to any buyer who qualifies as a first-time buyer,such as may occur if a parent jointly purchases a home with a son or daughter.Ownership of a vacation home or rental property not used as a principalresidence does not disqualify a buyer as a first-time home buyer.
Thetax credit is equal to 10 percent of the home’s purchase price up to a maximumof $8,000.
Thetax credit amount is reduced for buyers with a modified adjusted gross income(MAGI) of more than $75,000 for single taxpayers and $150,000 for marriedtaxpayers filing a joint return. The tax credit amount is reduced to zero fortaxpayers with MAGI of more than $95,000 (single) or $170,000 (married) and isreduced proportionally for taxpayers with MAGIs between these amounts.
Modifiedadjusted gross income or MAGI is defined by the IRS. To find it, a taxpayermust first determine "adjusted gross income" or AGI. AGI is totalincome for a year minus certain deductions (known as "adjustments" or"above-the-line deductions"), but before itemized deductions fromSchedule A or personal exemptions are subtracted. On Forms 1040 and 1040A, AGIis the last number on page 1 and first number on page 2 of the form. For Form1040-EZ, AGI appears on line 4 (as of 2007). Note that AGI includes all formsof income including wages, salaries, interest income, dividends and capitalgains.
Todetermine modified adjusted gross income (MAGI), add to AGI certain amountssuch as foreign income, foreign-housing deductions, student-loan deductions,IRA-contribution deductions and deductions for higher-education costs.
Possibly.It depends on your income. Partial credits of less than $8,000 are availablefor some taxpayers whose MAGI exceeds the phase-out limits.
Justas an example, assume that a married couple has a modified adjusted grossincome of $160,000. The applicable phase out to qualify for the tax credit is$150,000, and the couple is $10,000 over this amount. Dividing $10,000 by$20,000 yields 0.5. When you subtract 0.5 from 1.0, the result is 0.5. Todetermine the amount of the partial first-time home buyer tax credit that isavailable to this couple, multiply $8,000 by 0.5. The result is $4,000.
Here’sanother example: assume that an individual home buyer has a modified adjustedgross income of $88,000. The buyer’s income exceeds $75,000 by $13,000.Dividing $13,000 by $20,000 yields 0.65. When you subtract 0.65 from 1.0, theresult is 0.35. Multiplying $8,000 by 0.35 shows that the buyer is eligible fora partial tax credit of $2,800.
Pleaseremember that these examples are intended to provide a general idea of how thetax credit might be applied in different circumstances. You should alwaysconsult your tax advisor for information relating to your specificcircumstances.
Themost significant difference is that this tax credit does not have to be repaid.Because it had to be repaid, the previous "credit" was essentially aninterest-free loan. This tax incentive is a true tax credit. However, homebuyers must use the residence as a principal residence for at least three yearsor face recapture of the tax credit amount. Certain exceptions apply.
Participatingin the tax credit program is easy. You claim the tax credit on your federalincome tax return. Specifically, home buyers should complete IRS Form 5405 todetermine their tax credit amount, and then claim this amount on Line 69 oftheir 1040 income tax return. No other applications or forms are required, andno pre-approval is necessary. However, you will want to be sure that youqualify for the credit under the income limits and first-time home buyer tests.
Anyhome that will be used as a principal residence will qualify for the credit.This includes single-family detached homes, attached homes like townhouses andcondominiums, manufactured homes (also known as mobile homes) and houseboats. Thedefinition of principal residence is identical to the one used to determinewhether you may qualify for the $250,000 / $500,000 capital gain tax exclusionfor principal residences.
Thefact that the credit is refundable means that the home buyer credit can beclaimed even if the taxpayer has little or no federal income tax liability tooffset. Typically this involves the government sending the taxpayer a check fora portion or even all of the amount of the refundable tax credit.
Forexample, if a qualified home buyer expected, notwithstanding the tax credit,federal income tax liability of $5,000 and had tax withholding of $4,000 forthe year, then without the tax credit the taxpayer would owe the IRS $1,000 onApril 15th. Suppose now that the taxpayer qualified for the $8,000 home buyertax credit. As a result, the taxpayer would receive a check for $7,000 ($8,000minus the $1,000 owed).
Homebuyers in this situation may file an amended 2008 tax return with a 1040X form.You should consult with a tax advisor to ensure you file this return properly.
Yes.For the purposes of the home buyer tax credit, a principal residence that isconstructed by the home owner is treated by the tax code as having been"purchased" on the date the owner first occupies the house. In thissituation, the date of first occupancy must be on or after January 1, 2009 andbefore December 1, 2009.
Incontrast, for newly-constructed homes bought from a home builder, eligibilityfor the tax credit is determined by the settlement date.
program?
Yes.The tax credit can be combined with the MRB home buyer program. Note thatfirst-time home buyers who purchased a home in 2008 may not claim the taxcredit if they are participating in an MRB program.
No.You can claim only one.
Maybe.Anyone who is not a nonresident alien (as defined by the IRS), who has notowned a principal residence in the previous three years and who meets theincome limits test may claim the tax credit for a qualified home purchase. TheIRS provides a definition of "nonresident alien" in IRS Publication519.
No.A tax credit is a dollar-for-dollar reduction in what the taxpayer owes. Thatmeans that a taxpayer who owes $8,000 in income taxes and who receives an$8,000 tax credit would owe nothing to the IRS.
Atax deduction is subtracted from the amount of income that is taxed. Using thesame example, assume the taxpayer is in the 15 percent tax bracket and owes$8,000 in income taxes. If the taxpayer receives an $8,000 deduction, thetaxpayer’s tax liability would be reduced by $1,200 (15 percent of $8,000), orlowered from $8,000 to $6,800.
No, but if you purchased yourfirst home between April 9, 2008 and January 1, 2009, you may qualify for adifferent tax credit.
Yes.Prospective home buyers who believe they qualify for the tax credit arepermitted to reduce their income tax withholding. Reducing tax withholding (upto the amount of the credit) will enable the buyer to accumulate cash byraising his/her take home pay. This money can then be applied to the downpayment.
Buyersshould adjust their withholding amount on their W-4 via their employer orthrough their quarterly estimated tax payment. IRS Publication 919 containsrules and guidelines for income tax withholding. Prospective home buyers shouldnote that if income tax withholding is reduced and the tax credit qualifiedpurchase does not occur, then the individual would be liable for repayment tothe IRS of income tax and possible interest charges and penalties.
Further,rule changes made as part of the economic stimulus legislation allow homebuyers to claim the tax credit and participate in a program financed bytax-exempt bonds. Some state housing finance agencies, such as the MissouriHousing Development Commission, have introduced programs that provideshort-term credit acceleration loans that may be used to fund a down payment.Prospective home buyers should inquire with their state housing finance agencyto determine the availability of such a program in their community.
Yes.The law allows taxpayers to choose ("elect") to treat qualified homepurchases in 2009 as if the purchase occurred on December 31, 2008. This meansthat the 2008 income limit (MAGI) applies and the election accelerates when thecredit can be claimed (tax filing for 2008 returns instead of for 2009returns). A benefit of this election is that a home buyer in 2009 will knowtheir 2008 MAGI with certainty, thereby helping the buyer know whether theincome limit will reduce their credit amount.
Taxpayersbuying a home who wish to claim it on their 2008 tax return, but who havealready submitted their 2008 return to the IRS, may file an amended 2008 returnclaiming the tax credit. You should consult with a tax professional todetermine how to arrange this.
Yes.If the applicable income phase-out would reduce your home buyer tax creditamount in 2009 and a larger credit would be available using the 2008 MAGIamounts, then you can choose the year that yields the largest credit amount.
Joe Fustolo
Owner, Partner, Broker
503-789-1124 Mobile
www.PortlandRealEstateCoach.com
Feeling Stimulated???
You should.
Here is how the new $789 Billion Stimulus Plan effects
you:
So here's what we have achieved:
1. The loan limits will be raised to $727,000 in high cost areas
2. The tax credit will be raised to $8,000 with NO payback [a true credit]
3. The interest rates have come down 125-150 basis points
4. The bill has over $50 billion in it for
foreclosure mitigation, with Gainers Treasury plan signaling that the second
half of TARP and TALF will be used to mitigate foreclosures through a
government guarantee, drive down interest rates by buying another $200-300
billion of mortgage paper from the GSES's thereby freeing them up to do the
same with new mortgages, and Fannie has just agreed to lift the cap of 4
investment properties eligible for loans and raise it to 10.
In addition, we preserved what we have - which some tend
to forget is always on the table when these negotiations start up again -
mortgage interest deductability, real estate tax deductability, and the
$250,000/$500,000 cap gains exclusion (an overall package worth more than $100
billion and for some a very attractive funding source for their pet projects).
I look forward to keeping you up to speed so we can all be informed, efficient, and make educated decisions. As always, I am available to help you find any real estate solution regardless of how big or small.
Joe Fustolo
Owner, Partner, Broker
503-789-1124 Mobile
Owner, Partner, Broker
503-789-1124 Mobile
Whose market is it anyway?
Is it possible to have a buyer's AND seller's market at the same time? How could it possibly be a good time to buy and also be a good time to sell? Well, the answer depends on what you are doing!
For Buyers:
Interest Rates are LOW!!!
Rates have only been this low a couple times in the past 35 years. Rates are expected to increase later in 2009.
Buying at "The Turn" or near the end of the down cycle!
Historical down cycles (1973 - 1975,1980 - 1982, 1990 - 1992) have lasted approximately 3 years. The current downward cycle started 2 1/2 years ago.
Large Inventory of Homes!
We currently have a record number of homes on the market. The higher the supply, the more competitively priced they need to be. A large supply gives buyers many houses to choose from, in all areas, in our present market.
Real Estate as a Long Term Investment
Historically, real estate has done well as compared to the stock market. Look at the prices of homes and land 10, 20, 30, 50 ,100 years ago.... values are always increasing in the long term!
Financing Flexibility
Banks are now offering programs to buyers to stimulate the economy. The "lending freeze" is over and banks are beginning to cautiously lend money again and have many different programs to choose from!
For Sellers:
The majority of homes sold all around the Portland Metro area in 2008 were in the price range of $325,000 or less. Because of the reasons above, many renters are now owners, many investors are buying rentals for their portfolio (today is the "Golden Years" for 10 years in the future), many sellers are using this time to jump up to another price range.
Yes, it is a challenging market for those who must sell their current home before buying. The real question you must ask yourself when considering “price jumping” is what your return on investment will be. Will you be better off in 5 year, 10 year, 20 years? Most likely, the answer is YES!
Why you ask? Well, it's simple....... for the sake of easy math, say that home prices fell 10% over the past 2 1/2 years. For a $300,000 home, the sellers will have to take $270,000..... that is $30,000 less. However, those same sellers are now buyers who are looking in a higher price range. Movement in our market above $325,000 has been much slower..... let's say those prices are %15 less than they were 2 1/2 years ago. This means a $500,000 will sell for $75,000 less. If you sell for $30,000 less but buy at a $75,000 savings.... congratulations, you managed to buy at record low interest rate, very low housing prices, and your just added an additional $45,000 into your equity! If you are selling your house and buying equal or greater value, this market is also your market too!!! Please feel free to contact me if you or someone you know is thinking about or planning on moving.
If you would like to sell a property and buy "down" or not buy anything at all, please call me for more information and I will gladly explain your options and let you know if it is worth selling now or waiting.
For Buyers:
Interest Rates are LOW!!!
Rates have only been this low a couple times in the past 35 years. Rates are expected to increase later in 2009.
Buying at "The Turn" or near the end of the down cycle!
Historical down cycles (1973 - 1975,1980 - 1982, 1990 - 1992) have lasted approximately 3 years. The current downward cycle started 2 1/2 years ago.
Large Inventory of Homes!
We currently have a record number of homes on the market. The higher the supply, the more competitively priced they need to be. A large supply gives buyers many houses to choose from, in all areas, in our present market.
Real Estate as a Long Term Investment
Historically, real estate has done well as compared to the stock market. Look at the prices of homes and land 10, 20, 30, 50 ,100 years ago.... values are always increasing in the long term!
Financing Flexibility
Banks are now offering programs to buyers to stimulate the economy. The "lending freeze" is over and banks are beginning to cautiously lend money again and have many different programs to choose from!
For Sellers:
The majority of homes sold all around the Portland Metro area in 2008 were in the price range of $325,000 or less. Because of the reasons above, many renters are now owners, many investors are buying rentals for their portfolio (today is the "Golden Years" for 10 years in the future), many sellers are using this time to jump up to another price range.
Yes, it is a challenging market for those who must sell their current home before buying. The real question you must ask yourself when considering “price jumping” is what your return on investment will be. Will you be better off in 5 year, 10 year, 20 years? Most likely, the answer is YES!
Why you ask? Well, it's simple....... for the sake of easy math, say that home prices fell 10% over the past 2 1/2 years. For a $300,000 home, the sellers will have to take $270,000..... that is $30,000 less. However, those same sellers are now buyers who are looking in a higher price range. Movement in our market above $325,000 has been much slower..... let's say those prices are %15 less than they were 2 1/2 years ago. This means a $500,000 will sell for $75,000 less. If you sell for $30,000 less but buy at a $75,000 savings.... congratulations, you managed to buy at record low interest rate, very low housing prices, and your just added an additional $45,000 into your equity! If you are selling your house and buying equal or greater value, this market is also your market too!!! Please feel free to contact me if you or someone you know is thinking about or planning on moving.
If you would like to sell a property and buy "down" or not buy anything at all, please call me for more information and I will gladly explain your options and let you know if it is worth selling now or waiting.
Joe Fustolo
Owner, Partner, Broker
503-789-1124 Mobile
Owner, Partner, Broker
503-789-1124 Mobile
Do you hear what I hear......?
In
college, as part of my psychology curriculum, I had the opportunity to teach /
observe kindergarten "Head Start" kids. Some of the kids spoke English as
a second language. <Hang in there, I'm going somewhere with this> I
noticed that when I would tell one of these kids to do their work or to
behave..... all of a sudden there was a language barrier. They just didn't seem to understand what I was
saying. When we would announce that it was lunch time or
recess..... these kids would be the first ones at the door! The point is that
society is infused with news media on television, newspapers, websites, etc...
that will report on society's favorite topic: the pro's and con's of real
estate. However, the local trend is that a buyers and seller will read a pro vs.
con article on real estate but only retain all the pro's as it applies to them. I guess the
negative side of the media might in a different language in some cases.
Media
News drives me nuts.........!
I am a
native to the great state of Oregon. If I want to know the weekend weather
forecast, I am not going to pick up the paper and check the weather in
Hawaii..... or New York.... or Texas. I am also not going to price houses in
the Portland Metropolitan area based on their markets either. The point is, so
much of the media today is on a national level that most of the doom and gloom
of the rest of the Unite States is lumped in one averaged article. This isn't
good for Oregonians when we are actually in the top 3 for healthy real estate
markets. The other thing about our media is that normal, everyday news doesn't
sell. The sun either has to be brightly shining in the sky...... or the sky has
to be falling, that is what reporters focus on. I understand that you can not
blame the score keepers because your team is losing. The
media is not the sole purpose for our real estate and economical
problems today however; they do instill fear through national
statistics to the general public. I simply wish local news media would report on local real estate markets.
Headline readers
Many
people are headline readers. "The national average home sales declined XX%" or
"home sales statistics for days on the market increased XX%". This doesn't
apply to our market when our yearly local area average so far shows a slight appreciation..... not
in all neighborhoods or all cities, but the general statistics of Portland
Metro. For accurate and current information on our local market, find a knowledgeable, experienced Realtor!
Joe Fustolo
Owner, Partner, Broker
503-789-1124 Mobile
www.PortlandRealEstateCoach.com
Joe Fustolo
Owner, Partner, Broker
503-789-1124 Mobile
www.PortlandRealEstateCoach.com