Real Estate Agent – Orange County, California – Pat Monahan

The Federal Homebuyer Tax Credit  has been extended beyond November 30th of 2009. The new rules include a deadline to be in escrow or under contract by April 30th of 2010 and close the purchase by July 1, 2010. First-time buyers, those who have not owned their principle residence during the past 3 years, are eligible for a tax criedit up to $8,000. Also, current home owners who have lived in their principle residence for 5 consecutive years of the past 8 years are eligible for a tax credit up to $6,500.

The home purchase must be for a principle residence and it can include a boat, motor home or traditional house, condo or townhome up to an $800,000 limit. There are income limits to the new benefits extention. They are $125,000/yr for a single person and $225,000 for a couple.  A purchase by a dependent is not allowed. See your tax advisor for more details.

The good news is that more people can get tax relief when they purchase their next home through April 30, 2010 or have a binding contract to purchase on April 30th and close by July 1, 2010.

The other good news for home buyers is the historically low mortgage interest rate and the reduced market values for homes. This is a combination that probably won’t be seen again in our lifetimes. Contact your realtor to find the best buying opportunites in your area.

I have lovely coastal homes in all price ranges from Orange County to Long Beach, CA. I will find the right one for you. I’m only a click away!

First-time home buyers have an incredible opportunity to purchase a home at the lowest value in many years at the lowest mortgage rate in 40 years AND receive up to $8,000 in credit from the Federal Government.  Many qualified buyers are doing just that. The Federal tax credit expires on December 1, 2009. To receive the credit first-time buyers must close escrow by November 30th.

Many of these first-timers bought “starter” homes that were bank owned or in the foreclosure process or distressed “fixers” that needed TLC.  The investor-buyer has also benefitted with the significantly reduced values (down 25% to 40%), often buying distressed homes in “bulk”, fixing them and selling them for a profit.  The inventory of “low-end” properties in California is down and the demand is up.

All of this activity has put a floor (of sorts) in the Cailifornia market so that the CAR is now forecasting a slight increase in values for 2010.  All real esate is local and markets vary.  So, it’s important to find a knowledgeable realtor to assess your niche market value.

The bottom line for California going forward is an opportunity for the “move-up” buyer = someone who currently owns their home and wants to move into the next bigger, better, newer home while the “getting” is good.  Mortgage rates are historically low for everyone.  But they won’t stay low forever. Property values are low, but they are destined to go up again. First-time buyers are buying. That’s why NOW makes sense for the move-up seller.

Some economists predict an increase in interest rates as early as the second quarter of 2010.  Home values may or may not go down a little more in the coming months.  The banks are not dumping their “shadow inventory” of foreclosed homes, but releasing them slowly to maintain values or selling them in bulk to investors.  The window of opportunity will be open only so long.  Anyone who can buy a property and hold it for 2 to 3 years will be glad they bought in 2009/2010.

The recently enacted ”$798-billion stimulus plan” will affect home buyers and sellers in several ways. Here are some highlights. See your tax consultant/advisor or financial planner for details on how you may be affected or what advantages are available to you.

For first-time home buyers there is a provision to allow up to $8,000 in housing credit for purchases made after Jan. 1, 2009 and before Dec. 1, 2009.  The credit does not have to be paid back if the buyer stays in the home for at least three years. To be eligible as a “first-time home buyer” you either never owned a house before or you haven’t owned (or co-owned) a house within the last three years. The credit is hinged to the buyers income as well with eligibility limited to household incomes of $75,000 annual adjusted gross income for a single taxpayer and $150,000 for a couple filing jointly.  The house/home must be a principal residence purchase (not a second home or investment). A principal residence can be a house trailer, houseboat, co-op apartment or a condominium as well as a single family house.

Under the stimulus plan there is an increase in the conforming loan limits permitted under FHA, Fannie Mae and Freddie Mac to the 2008 high-cost area limits of a maximum of $729,750 (up from $625,500). This is important to all buyers who can now obtain lower interest rate financing to buy even median priced houses in high-cost areas like Southern California. The plan reinstates 2008 loan limits through Dec. 31, 2009.

There is also incentives in the “stim plan” for qualified energy efficiency improvements in existing homes. These credits can be applied to improvements in air-conditioning systems or natural gas and propane furnaces and water heaters. Funds are also allocated for local governments and non-profit groups to acquire and renovate foreclosed and vacant houses that are depressing property values in neighborhoods hit hard by the housing downturn.

The preceding information was obtained through the California Association of Realtors and an LA Times article written by Kenneth R. Harney, published Sunday, Feb. 22, 2009.