Debbie Brodie’s Chico Real Estate Blog

 There are homeowners in Chico who need to sell their homes, but want to wait until the timing is right.

 All indications are that we won’t see the high values of 2005 for quite awhile. So, for those of us that can hang on for several years, it may work to our advantage.  Jobs and wages need to catch up before housing values can edge higher again.

 For the rest of us, should we wait until spring? Spring sounds nice, the flowers are blooming and the grass is greener. The weather is warmer, so more people will be out looking, right?

 Personally, I think the right time to sell is now. I keep hearing that the ultra-low mortgage interest rates cannot last through the recovery. The rates will have to begin to increase slowly.

 But the largest factor in my decision is the federal tax credit. The $8,000 first time home buyer credit has been extended, but you must be in a binding contract before April 30, 2010. Same goes for the $6,500 tax credit for other owner occupied buyers.

 I think that the credit will cause a surge in buyers in February, March and especially April. Then, we may see a dip in May if the credit goes away, which is what we think will happen.

 I want the extra $6,500 to $8,000 to sweeten my deal. Sound as if I am talking like I have a house to sell?  I do.  And it will be coming on the market soon.  Anyone looking for a four bedroom, two bath in peak condition on a quarter acre for $285,000??

The first quarter of 2010 is a dynamite time to purchase a home! Low interest rates and once-in-a-lifetime tax credits are sweetening the pot. And you don’t have to be a first time home buyer for tax credits anymore.

The Worker, Homeownership, and Business Assistance Act of 2009 (H.R. 3548) was signed by President Obama on November 6^th, 2009.

This bill extended the $8,000 first time home buyer tax credit, which would have expired on December 1, 2009.

Home buyers now have until June 30, 2010 to close escrow on a qualifying home purchase. But, (and this is important) a binding contract must be entered into on or before April 30, 2010.

First time home buyers may receive up to $8,000 (or 10% of the home’s purchase price).

If you are not a first time home buyer, there is now a $6,500 credit available if you purchase a home as your residence.

There is a limit of $800,000 on the price of the home, and you must be over 18 in order to qualify. Income limits also apply. Eligibility phases out at $225,000 to $245,000 for married filing jointly.

It is best to check with your CPA or tax preparer to make sure that you can get the credit.

Then call me, and let’s find your dream home! There are still a few foreclosures and sales with great deals.

California Price Shows Year-To-Year Gain for First Time in Two Years
By: Robert A. Kleinhenz , Ph.D., Deputy Chief Economist

The median price of a home in California experienced its first year-to-year gain in over two years during the month of November, as the California housing market continued recent trends in terms of prices, supply, and sales.

The monthly median price crossed the $300,000 threshold in November with a median of $304,520, up 2.4 percent from the October median price of $297,500 and up 5.8 percent from $287,880 a year earlier. The situation has improved greatly from a year ago during the worst of the financial crisis, when the median price had registered 41.3 percent year-to-year decline.

After a 59 percent peak-to-trough decline, the California median price has increased 24.1 percent from a trough of $245,170 that occurred in February 2009.  The increase in price has been sustained by a combination of lean supply and high demand, the latter triggered by historically high affordability (See November article).

By comparison, the NAR national median price for existing single family homes, which experienced a 29 percent peak-to-trough decline, has increased by 4.7 percent from its trough of $164,200 in January 2009 to $171,900 in November 2009.

Nine consecutive month-to-month increases in the California median price have been the result of the lean inventory conditions throughout the year. The MLS-based unsold inventory index for California has averaged 4.8 months since the start of the year, well below the 7 month long run average. (See the October article for an analysis of the relationship between MLS-based unsold inventory, defaults, and foreclosures).

By comparison, the national unsold inventory index for single family homes has averaged 8.4 months over the year. Inventory levels in both California and the US have trended down for most of the year.

As for sales, California returned to pre-peak levels of sales in late 2008 and sustained them throughout 2009. With sales of 536,720 homes in November, the market was 4.6 percent lower than the October sales figure of 562,400, but 4.7 percent above the November 2008 figure of 512,840. Sales throughout the year have averaged 545,600, compared with the pre-peak monthly average over the 2000-2002 period of 537,300 homes.

Over the 2000-2002 period, US sales of existing homes averaged 4.8 million homes, compared with the low- to mid-4 million range of sales that the national market experienced from late 2007 until late this year when sales finally exceed the 5 million threshold.

The U.S. Treasury Department announced new guidelines this week designed to make short sales go more smoothly.

To qualify under these new guidelines:

• The property must be the home owner’s principal residence.
• The home owner must be delinquent on the mortgage or close to defaulting.
• The loan must have been made before Jan. 1, 2009, and be for less than $729,750.
• The borrowers’ total monthly mortgage payment must exceed 31 percent of their before-tax income.

Under the plan, borrowers will receive $1,500 from the government for selling homes for less than the amount of their mortgages. Mortgage-servicing companies will get $1,000 for each completed short sale. Second-mortgage holders can receive up to $3,000 of the sales proceeds in exchange for releasing their liens. Investors who hold the first mortgage can collect up to $1,000 from the government for allowing the payments.

Borrowers who complete a short sale under the program must be “fully released” from future liability for the debt, according to the guidelines

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Source: Associated Press, J.W. Elphinstone (11/01/2009) and The Wall Street Journal, Ruth Simon (11/01/2009)