Sales are up sharply in many of the hardest-hit markets, and prices are firming in many others, great news for real estate in star valley.
And now, even some of the country’s previously most-bearish economists and media outlets are seeing the light.
Last week, Dr. Mark Zandi, chief economist for Moody’s Economy.com, surprised analysts by announcing that “the bottom of the housing downturn is in sight for the nation.”
Just days later the Wall Street Journal — which had been among the most pessimistic of major U.S. dailies — ran a prominent article with this headline: “For some, it’s finally time to dive into the housing market.”
The article focused on purchasers in Phoenix, Seattle and Connecticut who recently found that lower prices and affordable mortgage rates made ownership possible for them. They got what appear to be great deals.
The Journal quoted one Phoenix buyer who had just picked up an attractively-priced first home as saying, “six months ago, I didn’t think I would ever own a home. Now I do. It’s so perfect.”
It’s obviously good news that doom and gloom economists like Zandi and the Wall Street Journal are picking up on what’s happening in local real estate markets. More important for the larger market, though, is that they are in the position to spread the word to consumers that it’s now not simply a “good time to buy,” it’s also a safe time to buy. Our real estate in wyoming has held its value in the troubled times.
Mortgage rates continue to hover near historic lows. According to the Mortgage Bankers Association, thirty year fixed rates last week averaged 5.2 percent, down from 5.3 percent the week before. Fifteen year rates average a flat five percent. What a great time to think about real estate in wyoming.
But don’t mistake the message here: The economy as a whole still is facing huge problems — unemployment at 7.6 percent, banks taking billions from the government, a stock market that’s still pumping out losses, household consumption down.
None of that is positive for real estate.
But here’s what may be developing: Just as housing’s troubles preceded the rest of the economy on the way down, there are increasing indications that housing could be out ahead on the national economic recovery.
Why? Because pent-up demand is strong, affordable financing is there for buyers with decent credit and a down payment, and improved federal tax credit incentives make the equation even better.
Once more consumers grasp the fact that the worst is over for real estate, we just might see some very encouraging numbers in the months ahead.
‘Stimulus’ and ‘Stability’ Equal Help for Homeowners
Here is an overview of some benefits of the Economic Stimulus Plan for 2009 and the Homeowner Affordability and Stability Plan that may impact you.
Stimulus Plan – Tax Credit for Homebuyers in real estate in wyoming.
The $787 Billion stimulus bill is made up of tax cuts and spending programs aimed at reviving the US economy. Although the package was scaled down from nearly $1 Trillion, it still stands as the largest anti-recession effort since World War II. One of the major benefits of the plan is a tax credit for new homebuyers. According to the plan, first-time homebuyers who purchase homes from the start of the year until the end of November 2009 may be eligible for the lower of an $8,000 or 10% of the value of the home tax credit.
It’s important to remember that the $8,000 tax credit is just that… a tax credit. The benefit of a tax credit is that it’s a dollar-for-dollar tax reduction, rather than a reduction in a tax liability that would only save you $1,000 to $1,500 when all was said and done. So, if you were to owe $8,000 in income taxes and would qualify for the $8,000 tax credit, you would owe nothing.
Better still, the tax credit is refundable, which means you can receive a check for the credit even if you have little income tax liability. For example, if you’re liable for $4,000 in income tax, you can offset that $4,000 with half of the tax credit… and still receive a check for the remaining $4,000!
The tax credit starts phasing out for couples with incomes above $150,000 and single filers with incomes above $75,000.
The tax credit is applicable to any home that will be used as a principle residence. Based on that guideline, qualifying “homes” include single-family detached homes, as well as attached homes such as townhouses and condominiums. In addition, manufactured or homes and houseboats used for principle residence also qualify. Buyers will have to repay the credit if they sell their homes within three years.
While details are sketchy – we will expect to get some clarity soon as to an additional tier of conforming loan amounts which had been first established in 2008. This tier of home loans are those greater than $417,000, and with a maximum that depends on the area, but is not greater than $729,750. These loans would be eligible for rates that are slightly higher than conforming loan rates, but less expensive than the standard “jumbo” loan rates.
Homeowner Affordability and Stability Plan
President Obama unveiled his plan to help stabilize the housing market and keep millions of borrowers in their homes. The Homeowner Affordability and Stability Plan includes two initiatives to help struggling homeowners. One is a refinancing program for homeowners with less than 20% equity in their homes, or who owe more than their home is worth. The second program attempts to lower monthly payments for homeowners at risk of losing their home. Many of the plan’s details are still being worked out and will not be announced until March 4. Here is an overview of the plan’s main components.
Refinancing Initiative
Under current rules, those families who own less than 20% equity in their homes have a difficult time refinancing and taking advantage of the historically low interest rates. This initiative is open to homeowners who have conforming loans which are guaranteed by Fannie Mae and Freddie Mac, and who owe up to 5% more than their home is worth.
According to the plan, “credit-worthy” or “responsible” homeowners can refinance their mortgage into a 30- or 15-year, fixed-rate loan based on current market rates. The refinanced loan, however, cannot include prepayment penalties or balloon payments. For many families, this low-cost refinancing may help reduce their mortgage payments by up to thousands of dollars per year.
As with the rest of the plan, details about this initiative will be released at a future date–including what, if any, credit score requirements will be included.
Stability Initiative
This initiative aims at providing help to individual families as well as entire neighborhoods by helping reduce foreclosures and stabilize home prices. It is intended to help homeowners who are struggling to afford their mortgage payments, but cannot sell their homes because prices have fallen significantly.
The goal of this initiative is simple: “reduce the amount homeowners owe per month to sustainable levels.” To accomplish this, lenders are encouraged to lower homeowners’ payments to 31% of their income by lowering their interest rate to as low as 2% or by extending the terms of the loan. In addition, lenders can also lower the principal owed by the borrower, with Treasury sharing in the costs.
Homeowners who are current on their mortgages but are struggling can still apply for this program. As such, this is one of the few programs designed to help homeowners who may face delinquency soon, but are current at the moment.
This initiative also includes a number of additional elements and incentives, including an extra incentive for borrowers to keep paying on time. The initiative will provide a monthly balance reduction payment that goes straight towards reducing the principal balance of the mortgage loan. As long as a borrower stays current on his or her loan, he or she can get up to $1,000 each year for five years.
Since the focus of this initiative is on helping families and neighborhoods, investment properties do not qualify. We have residents in star valley wyoming who will benefit from this enormously.
“Val D. Pendleton is the premier real estate broker in Star Valley Wyoming. Val’s family has a deep and respected heritage going back several generations in the Star Valley area. Specializing in Thayne, Afton, Bedford, Alpine and surrounding communities please visit the Coldwell Banker Country Estates website at http://www.cbcountry.com for a complete list of inventory offered by Coldwell Banker Country Estates or email us at val@cbcountry.com If we can assist you in any way, feel free to contact us directly 307-883-7000″
