My New Blog

If you read the papers, you'll get mostly a doom and gloom outlook...and rightly so.  Unemployment, along with other economic news, is dismal to discouraging.  So how can you explain an increasing, an UP, real estate market in a large segment? 

Where is this up market?  In Orange County and parts of Riverside and San Bernardino Counties, its clearly under $600K and it gets hotter the closer you get to the $300K and $400K range.  Its fueled, in my opinion, by two sources.  The first, and foremost, is the first time home buyer motivated by the $8K federal tax credit--a juicy offer that expires as of November 30, 2009.  The second is investors, fueled by low interest rates, increased affordability and available renters. 

If you are a first time home buyer, get looking!  You must close escrow by November 30, 2009.  If you are investor and would like an analysis of available properties and rents for one to four unit properties, just let me know.

If you have any other real estate questions, send me an email at johnsonlaw@sbcglobal.net or give me a call at 714 863-5485.  -m 

of the first time home buyer credit and if so, it will impact everyone...buyers, sellers and vets alike.  It is the passage by the house of a bill that would extend the $8K first time home buyer credit for vets ONLY--effectively killing it for the rest of humanity. 

Does this impact you? Yes, if you are a buyer, seller or vet.  See where you fall in below....

First Time Buyer--you've got until November 30, 2009.  This means if you find a house ASAP, select a 45 day or less escrow.  You are dangerously close to the expiration of the $8K tax credit.  Lenders can sometimes delay closings by requesting updated documentation...so beware.  Try to pick a closing date at least a week before the actual deadline.  Unless congress changes directions, the tax credit will be gone for closings on or after December 1, 2009.

Other Home Buyers--You may be one of the two groups who can see something positive out of this.  If you have been looking in the $600K and under market and have been frustrated by the amount of competition out there right now, then drop in demand that will likely occur on and after December 1, 2009 should work in your favor.

Sellers--You may not think this affects you, but if you are selling a property under $600,000, it should.  Demand will likely suffer a one, two punch in December.  The first punch happens every year--less buyers during the holidays.  The second punch is the loss of buyers currently motivated by the tax credit.  If you get a decent offer, I would encourage you to discuss it carefully with your agent. 

Vets/First Time Buyers--If this house bill passes the senate, you will get a six month extension to buy a home and still get the tax credit.  The proposed law provides the credit to those who served 90 or more days overseas in 2009.  If you did, then we salute you and thank you--and Uncle Sam has this nice $8,000 tax credit gift for you, too (assuming you haven't owned a home in the last 3 years).

If you have any real estate related questions, don't hesitate to ask. johnsonlaw@sbcglobal.net

Legislation has been introduced to increase the down payment for FHA loans from the current 3.5% to 5% (HR3706).  Rumor has it that this legislation will also restrict the ability to have financed closing costs.

The increased down payment legislation is supported by financial big wigs like Ben Bernanke.  The likely motivation is that increased down payments may mean that a homeowner is less likely to walk away from the home when financial trouble hits. 

And, speaking of financial trouble, such woes have hit the FHA.  Given the losses due to foreclosures, reserves have fallen below the congressional mandated 2%.  In my opinion, this legislation will be an attempt to prevent or reduce the likelihood of of that in the future.  My best guess is that this bill will work it way through congress like a hot knife through butter. 

So, if you are looking to buy with an FHA @ 3 1/2% down--get moving.  It may not be available for long. 

If you have any FHA or other real estate related questions, do not hesitate to ask.  You can email me at johnsonlaw@sbcglobal.net or call me at (714) 863-5485.  -Melinda