Have We Hit Bottom In Our Housing Market?
Five Reasons in support of a “Yes” answer:
1) For 18 of 19 months, the median home price in San Diego County has fallen. For the last 3 months, the median price has either remained unchanged or risen from month to month. Last month, the median home price increased by 1.8% from April 2009.
2) Closed transactions are up and home builders are clearing out their inventory thanks to 2 tax credits, including a $10,000 state tax credit for new home purchases- brand new homes that have not been lived in. Home builder confidence is up from last month.
3) If homes continue selling at the current rate, the inventory would be gone in about 4 months. An inventory of three to four months is considered indicative of a normal market, in which supply and demand are roughly in balance.
4) San Diego should bottom out first since we were one of the areas to first experience the big run-up.
5) “Flippers” have returned to the marketplace. As my SDSU investor clients know, prices are appreciating in the College Area. That market has already rebounded due to solid cash flow from high rents, low housing prices and low interest rates. I have seen numerous homes being “flipped” in that area.
Five reasons in support of a “No” answer:
1) Economy remains weak and unemployment rates are still rising.
2) A backlog of foreclosures might be looming from the moratorium lenders put in place around the holiday period.
3) The lending market is still very tight despite historically low interest rates. The guidelines in place by lenders, processing times and down payment requirements (non-FHA) are slowing approvals.
4) Potential back-log of non-distressed home sellers waiting to list their property for sale once there is a slight rebound, could flood the market with inventory.
5) The move-up buyers and high-end market price points remain weak.
2 More Important Items To Note In This Issue:
1) I have received a lot of questions about the $8,000 Federal Tax Credit to First Time Home Buyers. Click this link for slide show about this tax credit: 2009 Tax Credit Info. Below are a few things to note and points of confusion for some buyers:
- This bill has increased the first-time home buyer credit of 2008 from $7,500 to $8,000- don't get the details confused with the 2008 tax credit.
- First time home buyer means no home ownership in the last 3 years. So you might have owned a few homes in your lifetime but as long as you haven't been on the title of a home for the past 3 years, you qualify as a 1st time home buyer.
- The 2009 credit removes any payback requirement as long as you don't sell the home within 3 years of the purchase date and use it as your primary home.
- To qualify, homebuyers must have purchased a home after Jan. 1, 2009, and before Dec. 1, 2009- note this date...it doesn't go until the end of this year.
- This is a refundable tax credit- so if you only owe $5,000 in tax in 2009, the government will send you the difference of $3,000! Cash, money!
- Get your money now! You can send in an amended 2008 Tax Return to claim your credit this year!
- There are some income limits, phase out or pro-ration starts at $75k for single owners and $150k for married owners.
- Please remember I am not an accountant- contact your tax person with any questions and to verify the above information.
2) SEE THE SECTION BELOW ABOUT THE PROPERTY TAX REDUCTION- APPLICATIONS ARE DUE BY MAY 30TH.
SEND THIS NEWSLETTER TO ALL OF YOUR PROPERTY OWNING FRIENDS AND SAVE THEM MONEY ON THEIR PROPERTY TAXES!!!!!!!!!!!!!!!!!!!
