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As printed in the OC Register / Saddleback Valley NewsWritten by Jim E. Flynn, Century 21 Beachside Realtors, Lake Mission Viejo
April 29, 2010
Will the Homebuyers Tax Credit Fly Again?
Q. Hi Mr. Flynn, Can you let me know what you think of this article .
- Jack from Flagstaff, AZ."The REAL Housing Crash Has Just Started..” Get set for falling prices again. Round two is about to begin.
A. Thanks ! for your question Jack. Articles like you sent certainly do get attention and read because a further housing “Crash” will affect us all.
Some of the material came from the “Trumpet’ in Connecticut.. And it would appear that much of that geographic area is regrettably beginning to catch up with the blasted by bird shot housing market here in Orange County. The article covers a lot of alarming statements and I certainly do not have the Real Estate Crystal Ball for a clear view of the solution however, I will address a few of them.
It may be true that Banks are “Stuffed with reserves”/ overloaded with unwanted inventory. With this labyrinthian dilemma of formidable magnitude it is very difficult to understand why they would increase foreclosures from 7,500 per month to 45,000 per month and add to their unwanted inventories five fold? Most Banks do not have the trained personnel to handle the overload they have now. We recently “Birdogged” almost daily, an attempt for our clients to buy a property for over 8 months ..And it finally was dead in the water…with a “that dog won’t hunt” sad ending. The bank that was owed the first mortgage could not reach an agreement with the bank that held the second mortgage. So, dead Bird.
Another grim forecast indicated was that the Government Incentive Programs were being phased out. True, the $8,000. First time Buyer program ended the end of April for anyone who had not successfully opened a mortgage on their chosen property. Reportedly, Bloomberg reports that purchases of new homes in the U.S. surged 27% in March, the most in almost five decades as buyers rushed to qualify for the home buyer tax credit. The annual pace of 411,000 new home sales exceeded even the highest forecast of economists. Last month's purchase rate followed a record-low of 324,000 in February. Home sales increased in all four U.S. regions last month, led by 44 percent jump in the South. Now, there have been articles reporting that the Fraud claims with this program have been extensive and the Government will be hiring new staff to pursue the known illegal efforts.
I have had several readers ask, will the homebuyer Tax credit be extended for new and existing homes. At this writing, I my feeling is that it will not but, if the housing market and political climate continues with badly damaged wings it may be possible that we will see the tax credit fly again. If, it is extended I feel confident it will be with clipped wings extended to perhaps the end of this year.
So, Jack, I don’t have that clear vision crystal ball, however, I do know that confidence seems to build confidence and we are getting calls from more confident buyers who believe that her in Orange County prices are now at bargain levels and are aggressively talking to lenders to get Pre-Approved for loans so they can have their Realtors write qualified offers.
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Jim
Jim E. Flynn
CalBRE license #: 01215480
Phone: (949) 463-0739