Waiting a few extra days or weeks to purchase a home this spring could cost thousands of extra dollars as the Housing and Urban Development (HUD) implements several changes for loans guaranteed by the Federal Housing Administration (FHA). Here are a few reasons why:
Up Front Mortgage Insurance For FHA Loans:
Effective April 5, 2010, the cost of required up front mortgage insurance for loans guaranteed by FHA will increase from 1.75% to 2.25%. For a borrower purchasing a $200,000 home with a $7,000 down payment, the up front mortgage insurance will increase by $965. Up front mortgage insurance is typically financed in the final loan amount so the impact to a monthly payment will be minimal but overall, the increase is still borne by the borrower both upfront and monthly.
It is important to note that in order to be eligible for the lower cost up front mortgage insurance, a lender has to order a case number from the FHA before April 5, 2010. A case number can only be generated for loan applications where a property is involved and a fully executed purchase contract exists. Home buyers who have been pre-approved but are not under contract will not be eligible for the reduced premium effective April 5, 2010.
Seller Concessions:
Later this spring, the amount of money that a seller can return to the buyer from their sale proceeds will be reduced from 6% to 3%. The reduction in these "Seller Concessions" can increase the amount of cash a buyer will be required to pay at closing by $6,000 for a home purchase of $200,000.
Act Now:
All FHA mortgage applications should be submitted by the last week of March to avoid being affected by all of these costly changes that lie ahead.
Fannie Mae has announced that people purchasing a Fannie Mae-owned HomePath® property will receive up to 3.5 percent of the final sales price to be used toward closing cost assistance or their choice of appliances.
The offer is available to any owner-occupant who closes on the purchase of a property listed on HomePath.com before May 1, 2010.
Properties eligible for this incentive are listed on HomePath.com and most listings include detailed property descriptions, photographs, community and school information and more.
In addition, many Fannie Mae-owned properties are eligible for special HomePath Mortgage and HomePath Renovation Mortgage financing, which offers homebuyers an opportunity to purchase with as little as 3 percent down.
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California's inventory of unsold, previously owned homes has shrank to a five-year low in yet another sign that the state may be coming out of the worst housing slump in decades.
The supply of unsold single-family homes dropped to 3.8 months from 5.6 months a year ago and 16.6 months in January 2008, when inventories were at a peak, according to estimates released by the California Association of Realtors. The inventory levels are now at their lowest level since 2005, resulting in frenzied sales with multiple offers in some cities.
In Northern California's Santa Clara County, where inventory has dropped to 50 days from 243 a year ago. Many buyers have given up there search to find a home because many keep losing out on homes priced in the highly competitive sub-$500,000 market.
California's housing market is closely watched because it is the nation's biggest and helps fuel both the state's economy and the national building industry. With California still weighed down by economic problems, including a 12.4% unemployment rate, higher than the 10% rate nationwide, economists are looking at bellwethers like housing to determine when California will rebound.
Although most home prices remain well below their pre-bust highs of three years ago, California's overall housing market has shown signs of stabilizing since early last year. The median price of an existing, single-family home rose 8.4% from a year ago to $306,820, marking the second consecutive year-over-year increase and the 10th straight month-over-month jump, according to estimates by the state Realtors' association.
Extremely lean inventories have resulted in the slower year-over-year rate of 1.7%, compared with double-digit sales gains in recent months. Sales have been powered by a federal tax credit of $8,000 for first-time buyers, which Congress extended until the end of April.
The current inventory rate is running well under California's historical average since the 1980s of about an eight-month supply of existing homes on the market. That's partly because a once huge supply of foreclosures in the state has dwindled. In November, foreclosed properties accounted for 40% of all single-family sales, new and used, in California, compared with 58% in January, according to the most recent estimates by Zillow.com, a market tracker.
In an effort to stabilize home values and improve conditions in communities where foreclosure activity is high, HUD has employed a temporary policy that will expand access to FHA mortgage insurance and allow for the quick resale of foreclosed properties.
The waiver will take effect on February 1, 2010 and is effective for one year, unless otherwise extended or withdrawn by the FHA Commissioner. To protect FHA borrowers against predatory practices of "flipping" where properties are quickly resold at inflated prices to unsuspecting borrowers, this waiver is limited to those sales meeting the following general conditions:
All transactions must be arms-length, with no identity of interest between the buyer and seller or other parties participating in the sales transaction.
In cases in which the sales price of the property is 20 percent or more above the seller's acquisition cost, the waiver will only apply if the lender meets specific conditions.
The waiver is limited to forward mortgages, and does not apply to the Home Equity Conversion Mortgage (HECM) for purchase program.
Specific conditions and other details of this new temporary policy are in the text of the waiver, available on HUD's website.
The policy change will permit buyers to use FHA-insured financing to purchase HUD-owned properties, bank-owned properties, or properties resold through private sales. This will allow homes to resell as quickly as possible, helping to stabilize real estate prices and to revitalize neighborhoods and communities.
Total Number of Sales Closed in December 2009
Ø December 2009 had 2,796 closed sales or 93 closings per day
Average Days on the Market in August
Ø 73 Days for Attached Properties
Ø 69 Days for Detached Properties
Detached Properties/Single Family Homes
Median Sales Price: $385,000
Ø The Median Sales Price is up ▲ 2.3% from November 2009.
Ø Compared to December 2008, the Median Sales Price is up ▲ 10.1%.
Number Of Closed Sales: 1,856
Ø The number of closed sales for Detached Properties is up ▲ 18.1% from November 2009.
Ø Sales for Detached Properties are up ▲ 16.5% when compared to December 2008 sales.
Attached Properties/Condos/Townhomes
Median Sales Price: $215,000
Ø The Median Sales Price for Attached Properties is down ▼3.2% from November 2009.
Ø The Median Sales Price for Attached Properties, when compared with December 2008, is up ▲ 7.5%.
Number Of Closed Sales: 940
Ø Sales for Attached Properties are up ▲ 6.7% from November 2009.
Ø Sales for Attached Properties are up ▲ 11.1% compared to December 2008.
Number Of Available Listings in the San Diego MLS as of January 18th 2010
Ø 12,569 / 4.5 Months Supply of Inventory
Of Those 12,569 Listings:
Ø 8,418 are Active on the MLS / 3 Months Supply of Inventory
Ø 4,151 are Contingent with an “offer accepted pending lender approval” (i.e. Short Sale with an offer signed by the seller)
The extension and expansion of the homebuyer government tax credit that was signed into law November 6, 2009 allows more first time homebuyers to qualify and creates an entirely new tax credit for existing homeowners who buy a new home.
Both tax credits expire soon!
Buyers must have an executed home purchase contract on or before April 30, 2010 and have until June 30, 2010 to close the purchase transaction in order to qualify for the tax credit.
Key Provisions
Amounts:
- The first time homebuyer tax credit remains 10 percent of the cost of the home or $8,000 (whichever is less).
- The tax credit for existing homeowners is 10 percent of the value of the new home or $6,500 (whichever is less).
Definitions:
- A first time homebuyer cannot have owned a home during the past three years.
- Existing homeowners must have owned and lived in their current home for five consecutive years during the eight year period following new home purchase.
- Only primary residences qualify. No second homes or investment properties are allowed.
Income limits:
- The new law raises the income limits for those claiming the tax credit to $125,000 a year for individuals and $225,000 for joint filers, up from $75,000 and $150,000 respectively, in the previous first time homebuyer tax credit. After that, the value of the credit phases out.
- The cost of the new home cannot exceed $800,000.
AVAILABLE FOR: $1,000,000 - $1,379,000
Well maintained home in great neighborhood with panoramic ocean views from muliple rooms and entertainment decks. Interior in good condition but needs updating. Seller may have left some personal items that will be moved. Elementary school conveniently nearby. Short walk to the cliffs and coastal walking trails. Great Views!
Click on the link below for more information and pictures of this home:
http://christopherhutchinson.point2agent.com/Listing/ViewListingDetailsAuthenticated.aspx?preview=true&listingid=9865244
A MUST SEE!
Call Christopher Hutchinson, Buyers Agent with Coldwell Banker @ 619-987-4478 to schedule a showing of this spectacular home...
San Diego County’s median home price stood at $325,000, for the fourth straight month, according to MDA DataQuick. It’s the first time in 21 years of record keeping that the median price has stayed the same for so long.
Factors at work, which have helped to maintain this strong trend, include continued demand for lower cost homes, dropping inventories of homes listed for sale, historically low interest rates, and a general improvement in economic conditions and consumer confidence.
The median price for resale houses and condominiums rose slightly from October to November, but the new-home category plunged nearly $70,000, to $331,000 from $401,250, and was down 35 percent from November 2008’s $509,000.
As for sales, there were 3,148 transactions last month. This number is down 14.2 percent from October, as is usually the case in a seasonal slowdown but the count was up year over year, as has been the case since July 2008. The 17.8 percent increase from November 2008 was the strongest upturn since June’s 20 percent rise. Resale houses were up 11 percent, resale condos were up 23.5 percent and new-home sales were up 42.7 percent.
There are currently 10,282 active and contingent listings on the market in San Diego County, which is the smallest total since April 2005. At the current rate of sales, that represents about a three-month supply of inventory. Continued tight inventory has lead to a strong sellers market, where sellers name their terms and buyers no longer have the upper end.
This has been the case with many low cost properties that have attracted multiple offers and overbidding by all cash investors, who regularly beat out owner occupants who need a mortgage.
Low cost foreclosure activity in San Diego County is down 32.6 percent of all resales, compared with more than 50 percent at the beginning of the year. This has been mirrored by an increase in higher cost home sales. The percentage of resale houses selling for more than $800,000 stood at 9.2 percent in November, up from 5.7 percent a year ago.
PROPERTY FEATURES:
This spectacular 2,400 square foot home is 1 block from the National Forest and offers 3 bedrooms, 2.5 baths, offers a large sleeping loft and sleeps 10 people comfortably.
This home is located 2/3 of a mile away from Bear Mountain Ski Resort, this home is located in the desirable Moonridge area of Big Bear and offers sweeping ski slope views of Bear Mountain.
This home has tons of great amenities including ski slope views, wet bar, multiple fireplaces and dramatic soaring ceilings. This home will make your Big Bear vacation very special.
The huge double sided rock fireplace sets the tone for the house. Start a roaring fire and enjoy it from the large dining area and from the living room.
It’s a very quick trip to the ski slopes to drop off or pick up the kids. After a hard day on the slopes enjoy the spa and watch the skiers and boarders as they come down for the day.
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Lowe’s, the home-improvement chain, will begin selling do-it-yourself, 40-pound solar panels nationwide for $895 each.
The panels are designed by Akeena Solar, Inc., based in Los Gatos, California. Akeena says installation is doable for a novice, but applying for government and utility permits might take some expertise.
Akeena panels produce 175 watts of electricity, enough to power a flat-screen TV. Most purchasers will want more than one. Lowe’s also is offering software that allows homeowners to use their home computers to monitor the performance of each panel.
The National Association of Realtors recorded in October an unprecedented ninth consecutive month of increases in the number of signed contracts. Although these are not closed sales and some deals can fall through, signed contracts are a good indicator of where the housing market is headed. Between September and October, the National Association of Realtors Pending Home Sales Index rose 3.7% to 114.1 from 110 in October. The index is 31.8% higher than a year ago, when it was 86.6. That's the biggest year-over-year gain in the history of the index.
The pending home sales index is also at its highest level since March 2006. The rise confounded expert expectations, who forecasted a 1% drop in new contracts.
Much of the credit for increased sales is given to the homebuyer's tax credit, which first-time homebuyers could claim to reduce their taxes by up to $8,000.
The good news is that number of homes on the market has declined, removing some of the bloat that has depressed prices. There is now a seven month supply of homes on the market at the current rate of sale. This is down from 10.2 months a year ago. Analyst predicted that housing conditions could return to near normal and home prices firm up by mid-2010.
Total Number of Sales Closed in October 2009
Ø October 2009 had 2,906 closed sales or 97 closings per day
Ø September 2009 had 2,717 closed sales or 91 closings per day
Summary: October 2009 sales are up ▲ in comparison to September 2009
Average Days on the Market in August
Ø 74 Days for Attached Properties
Ø 71 Days for Detached Properties
Detached Properties/Single Family Homes
Median Sales Price: $380,000
Ø The Median Sales Price is down ▼ 1.2 from September 2009.
Ø Compared to October 2008, the Median Sales Price is up ▲ 4.1%.
Number Of Closed Sales: 1,877
Ø The number of closed sales for Detached Properties is up ▲ 7.1% from September 2009.
Ø Sales for Detached Properties are up ▲ 1.1% when compared to October 2008 sales.
Attached Properties/Condos/Townhomes
Median Sales Price: $210,000
Ø The Median Sales Price for Attached Properties is up ▲ 2.5% from September 2009.
Ø The Median Sales Price for Attached Properties, when compared with October 2008, is up ▲ 4.7%.
Number Of Closed Sales: 1026
Ø Sales for Attached Properties are up ▲ 6.7% from September 2009.
Ø Sales for Attached Properties are up ▲ 4.6% compared to October 2008.
AVAILABLE FOR: $599,900
This Bank Owned property features:
- 4 Bedrooms - 2 Baths
-2-Car Attached Garage - 1,948 square feet
- Rests on a large 7,800 square foot lot - All New Vinyl Windows
- New Vinyl Sliding Glass Doors - New Carrier Air Conditioning Unit
- New Gas Heater, New Ducting, New Door, Upgraded Electrical. Granite Counters, Recessed Lighting, Seller will Carpet and Paint.
A MUST SEE!
Contact Christopher Hutchinson with Coldwell Banker @ 619-987-4478 For More Info About This Home...
On November 6, 2009, President Obama signed a bill to extend the tax credit for first-time homebuyers (FTHBs) through June 30, 2010. The bill also opens up opportunities for others who are not buying a home for the first time.
TAX CREDIT OVERVIEW
Who Gets What?
First-Time Homebuyers (FTHBs): First-time homebuyers (that is, people who have not owned a home within the last three years) may be eligible for the tax credit. The credit for FTHBs is 10% of the purchase price of the home, with a maximum available credit of $8,000.
Single taxpayers and married couples filing a joint return may qualify for the full tax credit amount.
Current Owners: The tax credit program now gives those who already own a residence some additional reasons to move to a new home. This incentive comes in the form of a tax credit of up to $6,500 for qualified purchasers who have owned and occupied a primary residence for a period of five consecutive years during the last eight years.
Single taxpayers and married couples filing a joint return may qualify for the full tax credit amount.
What are the New Deadlines?
In order to qualify for the credit, all contracts need to be in effect no later than April 30, 2010 and close no later than June 30, 2010.
What are the Income Caps?
The amount of income someone can earn and qualify for the full amount of the credit has been increased.
Single tax filers who earn up to $125,000 are eligible for the total credit amount. Those who earn more than this cap can receive a partial credit. However, single filers who earn $145,000 and above are ineligible
Joint filers who earn up to $225,000 are eligible for the total credit amount. Those who earn more than this cap can receive a partial credit. However, joint filers who earn $245,000 and above are ineligible.
What is the Maximum Purchase Price?
Qualifying buyers may purchase a property with a maximum sale price of $800,000.
What is a Tax Credit?
A tax credit is a direct reduction in tax liability owed by an individual to the Internal Revenue Service (IRS). In the event no taxes are owed, the IRS will issue a check for the amount of the tax credit an individual is owed. Unlike the tax credit that existed in 2008, this credit does not require repayment unless the home, at any time in the first 36 months of ownership, is no longer an individual’s primary residence.
How Much are First-Time Homebuyers (FTHB) Eligible to Receive?
An eligible homebuyer may request from the IRS a tax credit of up to $8,000 or 10% of the purchase price for a home. If the amount of the home purchased is $75,000, the maximum amount the credit can be is $7,500. If the amount of the home purchased is $100,000, the amount of the credit may not exceed $8,000.
Who is Eligible fort FTHB Tax Credit?
Anyone who has not owned a primary residence in the previous 36 months, prior to closing and the transfer of title, is eligible.
This applies both to single taxpayers and married couples. In the case where there is a married couple, if either spouse has owned a primary residence in the last 36 months, neither would qualify. In the case where an individual has owned property that has not been a primary residence, such as a second home or investment property, that individual would be eligible.
As mentioned above, the tax credit has been expanded so that existing homeowners who have owned and occupied a primary residence for a period of five consecutive years during the last eight years are now eligible for a tax credit of up to $6,500.
How Much are Current Home Owners Eligible to Receive?
The tax credit program includes a tax credit of up to $6,500 for qualified purchasers who have owned and occupied a primary residence for a period of five consecutive years during the last eight years.
Can Homebuyers Claim the Tax Credit in Advance of Purchasing a Property?
No. The IRS has recently begun prosecuting people who have claimed credits where a purchase had not taken place.
Can a Taxpayer Claim a Credit if the Property is Purchased from a Seller with Seller Financing and the Seller Retains Title to the Property?
Yes. In situations where the buyer purchases the property, even though the seller retains legal title, the taxpayer may file for the credit. Some examples of this would include a land contract or a contract for deed.
According to the IRS, factors that would demonstrate the ownership of the property would include:
1. Right of possession,
2. Right to obtain legal title upon full payment of the purchase price,
3. Right to construct improvements,
4. Obligation to pay property taxes,
5. Risk of loss,
6. Responsibility to insure the property, and
7. Duty to maintain the property.
Are There Other Restrictions to Taking the FTHB Credit?
Yes. According to the IRS, if any of the following describe a homebuyer’s situation, a credit would not be due:
· They buy the home from a close relative. This includes a spouse, parent, grandparent, child or grandchild. (Please see the question below for details regarding purchases from “step-relatives.”)
· They do not use the home as your principal residence.
· They sell their home before the end of the year.
· They are a nonresident alien.
· They are, or were, eligible to claim the District of Columbia first-time homebuyer credit for any taxable year. (This does not apply for a home purchased in 2009.)
· Their home financing comes from tax-exempt mortgage revenue bonds. (This does not apply for a home purchased in 2009.)
· They owned a principal residence at any time during the three years prior to the date of purchase of your new home. For example, if you bought a home on July 1, 2008, you cannot take the credit for that home if you owned, or had an ownership interest in, another principal residence at any time from July 2, 2005, through July 1, 2008.
Can Homebuyers Purchase a Home from a Step-Relative and Still be Eligible for the Credit?
Yes. As long as the person they buy the home from is not a direct blood relative, the purchase would be allowed.
If a Parent (Who Will Not Live In The Property) Cosigns for a Mortgage, Will Their Child Still be Eligible for the Credit?
Yes, provided that the child meets the other requirements for the tax credit.
Contact Christopher Hutchinson with Coldwell Banker @ 619-987-4478 For More Information....