My latest podcast talks about how our market has changed over the last year. You won’t be surprised to hear prices continued to drop going into this summer but you find a few details a little surprizing.
Go to the podcast link at the top of the page to listen to the July market conditions update!
Has anyone heard about the campaign “Protect Our Homes”? 375,000 people in Arizona have and signed the petition to bring this proposal to the voting polls this fall. By the way that was a record for a petition drive in Arizona, which should show us how important this issue is to all of us that live or buy a home in Arizona.
What exactly is this is? It’s a campaign sponsored by the Arizona Realtor Association to permanently stop the state government from imposing a “transfer or sales tax” on our homes. A transfer tax would only hurt an already struggling real estate industry and make it harder to sell you home. If the government were able to pass their own tax before this is made permanent, each of us could be on the hook for thousands of dollars when we sell or even transfer our home to a trust.
How would you feel if you had to pay a “tax” just for the privilege of selling your home. In Illinois, depending on the county, they pay up to 7% of the sales price. So let’s say you sell you home because of a relocation, your home sells for $300,000, that means you owe the state and local government $21,000. Now our leaders in Arizona may say “well we’re thinking of just a 1% tax or maybe a couple hundred dollars”. That’s doesn’t sound so bad…. but that’s what most states said to get the bill passed then over time decided they needed to raise that a little, then a little more, etc.
How can you help? By voting “YES” to the proposal this November. By voting YES you would help amend the state constitution so the government could NEVER impose a tax on you property.
The ballet votes are being counted right now and once they are validated I’ll be able to bring you more information so watch for upcoming articles on this transfer tax issue! If you’d like to leave a comment about this I would be happy to pass it on to the proper people
Here’s a better explaination of what the govenment passed last week! It should help the majority of people that are having trouble keeping their home but time will tell. If you have any questions about this please post a comment or call me direct.
GSE Reform – including a strong independent regulator, and permanent conforming loan limits up to the greater of $417,000 or 115% local area median home price, capped at $625,500. The effective date for reforms is immediate upon enactment, but the loan limits will not go into effect until the expiration of the Economic Stimulus limits (December 31, 2008).
FHA Reform – including permanent FHA loan limits at the greater of $271,050 or 115% of local area median home price, capped at $625,500; streamlined processing for FHA condos; reforms to the HECM program, and reforms to the FHA manufactured housing program. The effective date for reforms is immediate upon enactment, but the loan limits will not go into effect until the expiration of the Economic Stimulus limits (December 31, 2008).
Homebuyer Tax Credit - a $7500 tax credit that would be would be available for any qualified purchase between April 8, 2008 and June 30, 2009. The credit is repayable over 15 years (making it, in effect, an interest free loan).
FHA foreclosure rescue – development of a refinance program for homebuyers with problematic subprime loans. Lenders would write down qualified mortgages to 85% of the current appraised value and qualified borrowers would get a new FHA 30-year fixed mortgage at 90% of appraised value. Borrowers would have to share 50% of all future appreciation with FHA. The loan limit for this program is $550,440 nationwide. Program is effective on October 1, 2008.
Seller-funded down payment assistance programs – codifies existing FHA proposal to prohibit the use of down payment assistance programs funded by those who have a financial interest in the sale; does not prohibit other assistance programs provided by nonprofits funded by other sources, churches, employers, or family members. This prohibition does not go into effect until October 1, 2008.
VA loan limits – temporarily increases the VA home loan guarantee loan limits to the same level as the Economic Stimulus limits through December 31, 2008.
Risk-based pricing – puts a moratorium on FHA using risk-based pricing for one year. This provision does will be effective from October 1, 2008 through September 30, 2009.
GSE Stabilization – includes language proposed by the Treasury Department to authorize Treasury to make loans to and buy stock from the GSEs to make sure that Freddie Mac and Fannie Mae could not fail.
Mortgage Revenue Bond Authority – authorizes $10 billion in mortgage revenue bonds for refinancing subprime mortgages.
National Affordable Housing Trust Fund – Develops a Trust Fund funded by a percentage of profits from the GSEs. In its first years, the Trust Fund would cover costs of any defaulted loans in FHA foreclosure program. In out years, the Trust Fund would be used for the development of affordable housing.
CDBG Funding – Provides $4 billion in neighborhood revitalization funds for communities to purchase foreclosed homes.
LIHTC – Modernizes the Low Income Housing Tax Credit program to make it more efficient.
Loan Originator Requirements – Strengthens the existing state-run nationwide mortgage originator licensing and registration system (and requires a parallel HUD system for states that fail to participate). Federal bank regulators will establish a parallel registration system for FDIC-insured banks. The purpose is to prevent fraud and require minimum licensing and education requirements. The bill exempts those who only perform real estate brokerage activities and are licensed or registered by a state, unless they are compensated by a lender, mortgage broker, or other loan originator.
If you listen to the same media (local and national) that I do, you might be surprised to hear that prices have actually been climbing. Most of the stories surround the existing housing crisis, Freedie Mae/Mac and very little about any good news.
For the most part, YES we do have a problem and of course we need help getting out of it but what you might not be hearing is how the inventory-to-sales has gotten better. How the median housing prices have been climbing for 4 months straight.
Here’s the statement from NAR-
According to NAR statistics, the median home price has fallen from a high of $230,200 in July 2006 to a low in February 2008 at $195,600, a drop of 15%. Since February, however, it has risen steadily every month. By May the index (which will be revised on July 24) had risen to $208,600, up $13,000 and a full 6.6%. Another indicator, the mean home price (otherwise known as the average home price), has also shown strength and has risen from a low of $242,000 also in February of this year to $253,100, a rise of $11,100 or 4.5%. It, too, has risen every month since February of this year.
On my last Podcast I covered the market conditions here in Phoenix. Things have gotten better but we still have a ways to go so “Is now the time to buy?”. Should you wait to see what happens? All I can say is the media is always months behind the curve so your attempts to time the market should not be dependent on the media. Feel free to call or email me for more information on specific markets and watch for my next Podcast for more information!
