Increased demand? Multiple offers?

One of the Key Indicators of the rules of investing is supply and demand. Refer back to my previous blog in December!

DEMAND? Demand is surging!Some local Orange County areas have doubled their sales numbers compared to last year. Multiple offers are becoming common place and the surprising new development is how many offers are cash! If history repeats itself, and it usually does, when stock markets go down people look for someplace else to put their money. Combine this with the instability of banks right now and where can you put your money? Real estate has been a proven asset for the long term investor. It will not disappear and it can provide income! What more could you ask for!

SUPPLY? Supply of available homes for sale is decreasing. Several factors are contributing to this such as the moratoriums on foreclosure, sellers unwilling to sell in adverse market conditions, and banks are more willing to help troubled borrowers stay in their homes. Supply is at an average of 4 months in the low to mid price ranges.

Last week’s newly revealed stimulus plans haven’t even factored into the market yet. Impact is hard to predict but this is the basics as I understand them so far. More details will be revealed when the programs officially launch but here is how the President’s Economic Stimulus Plan for 2009 is shaping up so far!

Tax Credit - $8,000 tax credit for anybody that purchases a home and  is a “first time home buyer” technically anyone who has not owned a home in the prior three years.  This credit is good on any primary residencere from January 1st through the end of November, 2009.  Income limitations do apply and the tax creditt begins to phase out for two income families above $150,000 and individuals above $75,000.  Another requirement is to live in the home for two years.

Conventional Loan Limit - the conventional loan limit for high cost areas will increase for high cost areas to last year’s $729,750 level.  The limit had dropped to $625,500 on December 31, 2009.  This should restore buying activity in the $700,000 and $800,000 price range.

California New Home Tax Credit. In our newly signed California budget -finally!-there is a provision for a tax credit up to $10,000 good on the purchase on any new home-defined as never before lived in! No details as yet, and I am sure there will be some restrictions-there always are- but watch for news on this tax credit. Builders are already sitting out this maarket which is why we have the news reporting a decrease in builder starts. Frankly it seems like a good idea considering the amount of inventory that needs to be sold. Still this will definitely help home builders to clear out standing builder inventory which is stagnating and on their books! 

Both comments and pings are currently closed.

Comments are closed.

This theme is sponsored by California along with Texas, Radio and corporate office contact address