Lake Tahoe Real Estate Update

2009 CAR Homebuyer Survey

2009 Homebuyer Tax Credit

Tax Credit Can Be Applied to Purchase

Interest Rates Show Modest Rise

California New Home Sales on the Rise

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C.A.R. Statistics

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This Report by the Ca. Association of Realtors offers a glimpse at what Calif. homebuyers are looking for in 2009.

Increased affordability, low mortgage rates motivating home buyers, according to C.A.R.’s “2009 Survey of California Home Buyers”

Quick Facts:
· Share of first-time buyers rose to 38 percent in 2009, compared with 19 percent in 2008
· Forty-nine percent of all buyers purchased a home through a traditional market sale
· Eighty-eight percent of traditional market sales were financed through fixed-rate mortgages

Favorable home prices, record-low interest rates, and the belief that rates will rise in the near future were the primary motivators leading home buyers to purchase in 2009 compared with last year, according to the CALIFORNIA ASSOCIATION OF REALTORS®’ (C.A.R.) “2009 Survey of California Home Buyers” released today. Sixty-eight percent of buyers said price decreases motivated them to buy a home, while 39 percent reported low interest rates helped them move to a better location. Twenty-three percent claimed the likelihood that rates will move up as the motivating factor.

“After back-to-back years of sharp declines, home sales in California rebounded in 2008 and early 2009,” said C.A.R. President James Liptak. “The increase reflected the combination of favorable prices, low mortgage rates, and home buyer tax credits, fueled primarily by sales of distressed properties that accounted for more than half of the state’s transactions.

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Source: California Association of Realtors(07/7/2009)

The homebuyer tax credit is one of 10 key provisions of the American Recovery and Reinvestment Act signed by President Obama into law on Feb. 17, 2009.

The bill provides for a $8,000 tax credit that would be available to first-time home buyers for the purchase of a principal residence on or after January 1, 2009 and before December 1, 2009. The credit does not require repayment. Most of the mechanics of the credit will be the same as under the 2008 rules: the credit will be claimed on a tax return to reduce the purchaser's income tax liability. If any credit amount remains unused, then the unused amount will be refunded as a check to the purchaser.

Frequently Asked Questions

National Association of Realtors Presentation:
The 2009 First-Time Homebuyer Tax Credit

Source: National Association of Realtors

U.S. Dept. of Housing and Urban Development (HUD) Secretary Shaun Donovan recently announced that the Federal Housing Administration (FHA) will allow home buyers to apply the administration's new $8,000 first-time home buyer tax credit toward the purchase costs of a FHA-insured home. The American Recovery and Reinvestment Act of 2009 offers home buyers a tax credit of up to $8,000 for purchasing their first home. Families can only access this credit after filing their tax returns with the IRS. Home buyers using FHA-approved lenders can apply the tax credit to their down payment in excess of 3.5 percent of appraised value or their closing costs, which can help achieve a lower interest rate.

Currently, borrowers applying for an FHA-insured mortgage are required to make a minimum 3.5 percent down payment on the purchase of their home. Current law does not permit approved lenders to monetize the tax credit to meet the required 3.5 percent minimum down payment, but, under the terms of the announcement, lenders can now monetize the tax credit for use as additional down payment, or for other closing costs, which can help achieve a lower interest rate.

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(Courtesy of HUD)

McLean, VA – Freddie Mac (NYSE:FRE) today released the results of its Primary Mortgage Market Survey® (PMMS®) in which the 30-year fixed-rate mortgage (FRM) averaged 5.14 percent with an average 0.7 point for the week ending December 31, 2009, up from last week when it averaged 5.05 percent. Last year at this time, the 30-year FRM averaged 5.10 percent.

“Although long-term mortgage rates rose for the fourth week in a row, they still remain affordable by historical standards,” said Frank Nothaft, Freddie Mac vice president and chief economist. “Based on today's median loan amount of $138,000, monthly principal and interest payments for a 30-year fixed-rate mortgage are close to one-third less than a decade ago when rates peaked at 8.6 percent in May 2000. This translates into almost 50 percent less in interest payments over the full 30-year term.

“Nationally, the housing market is slowly improving. House prices rose for the fifth consecutive month in October to the highest level since the beginning of 2009, according to the S&P/Case-Shiller® 20-city composite index. Eleven of the cities experienced positive growth.”

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(Courtesy of Freddie Mac)

Sales in new-home communities of 10 units or more in California rose 25 percent in October compared with a year ago, according to the monthly California Building Industry Association (CBIA)/HanleyWood Market Intelligence report. The increase marked the first year-to-year sales appreciation since December 2006, according to CBIA. Sales of single-family homes increased 4 percent, while sales of townhomes and multiple-unit homes rose 36 percent. Condominium sales increased 94 percent compared with a year ago, according to the report.

“While this month’s figures are encouraging, we must keep in mind that we’re comparing the figures to October of 2008, which was the second lowest month of nominal sales we’ve seen during the downturn,” said Jonathan Dienhart, director of published research for HanleyWood Market Intelligence.

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