Saturday, February 7, 2009

Eyes are Watching

All eyes are watching for the Stimulus package to give the economy and us all a boost. The real estate portion of that economy is looking more and more promising. I am attaching a couple of articles for those of you who are interested in the $15,000 stimulus tax credit for purchase of a new home. There is an additional proposal that the mortgage rate be 4% for 30 years. This would be so healthy for new home buyers. The other article is about affordability. Please enjoy and let me know your thoughts. Caroline

Editorial - A Stimulus for the Poor -

Also about the amended homebuyer tax credit for first timehomebuyers

Housing aid gaining steam in stimulus bill
By ALAN ZIBEL Associated Press Writer
Feb 2nd, 2009 WASHINGTON -- Homebuyers could see lower mortgage rates and get tax credits as part of a sweeping economic stimulus package being considered on Capitol Hill.
Lawmakers are heeding the pleas of two powerful and well-heeled interest groups: real estate agents and homebuilders. Those industries have lobbied hard in recent weeks for more expansive assistance for their flailing members.
The Senate took up an $884 billion version of the stimulus legislation on Monday after an $819 billion version passed the House last week without a single Republican vote.
Any government aid for the housing sector should be temporary and apply to all buyers to help boost sales of expensive homes as well as low-priced ones, said Wachovia Corp. economist Mark Vitner.
"Nobody wants to buy a home before prices have bottomed out," Vitner said. "Unfortunately if everybody has the same idea, prices are going to keep falling."
With median sales prices back to levels last seen in mid-2003 and rates on 30-year mortgages hovering around 5 percent, homes have become far more affordable in most of the country. But some economists say they still have further to fall, particularly in former bubble markets like California and the Northeast.
Plus, some question the amount of money going toward relatively wealthy homebuyers, instead of renters or those who can't qualify for a mortgage.
"I'm amazed," said Dean Baker, an economist and co-director of the liberal Center for Economic Policy Research in Washington. "We're giving people way more money -- just because they bought a home -- than if they're unemployed."
Meanwhile, Senate Minority Leader Mitch McConnell, R-Ky., told reporters Monday that Republicans would offer a plan to have the government step in to reduce mortgage rates to around 4 percent, which could shore up home prices and lower housing payments for millions of Americans.
"A stimulus bill must fix the main problem first, and that's housing," McConnell said. "That's how all of this began. We think you ought to go right at housing first."
Republicans want to have banks lower the interest rates to 4 percent or 4.5 percent on 30-year fixed rate loans, up to a certain cap. Rates could drop if Fannie Mae and Freddie Mac agreed to buy the mortgages.
The two companies were seized by the government in September, and have bought the majority of the new home loans issued over the past year because Wall Street's appetite for mortgage securities has vanished. The new rates would be available through 2010 for both new purchases and refinanced loans.
Sen. Charles Schumer, D-N.Y on Sunday told "Face the Nation" on CBS that Democrats would support a GOP-backed idea to double a home buyers' tax credit from $7,500 to $15,000 and make it available to all buyers instead of those purchasing their first home. He also said the Obama administration is considering ways for the government to lower mortgage rates.
"There seems to be real bipartisan support for a stronger housing focus," said Mary Trupo, a spokeswoman for the National Association of Realtors, which has rallied its members to push for more aid to the hobbled market.
The Realtors group spent more than $17 million on lobbying last year, with more than $6.5 million coming in the final three months, according to disclosure forms.
The building industry, which has been devastated by the housing bust, has been pushing a package of subsidies that would bring mortgage rates to just under 3 percent for the first half of this year. The National Association of Home Builders -- which spent more than $4.5 million lobbying last year -- favors a tax credit of up to $22,000 for home purchases.
Associated Press Writers David Espo and Andrew Taylor contributed to this report.
Salon provides breaking news articles from the Associated Press as a service to its readers, but does not edit the AP articles it publishes.
Copyright 2009 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Thursday, January 22, 2009

Thinking of Buying on Martha's Vineyard?

Experienced buyer’s agents know that there is more to getting a great deal than just buying at the lowest price. Remember that no one can predict when the lowest price will occur and by the time you realize that it has happened, it is going up. Then you will be competing with everyone who was also waiting for the bottom. Reports from across the country are showing that various markets are beginning to recover and numbers of sales are increasing.
Mortgage rates play a large part in the overall price of your purchase. Remember, as prices go down, the interest rate usually goes up. A lower interest rate gives you more buying power. For instance, if you buy a house for $400,000 with a 10% deposit*, a mortgage of $360,000 would cost approximately $1950. per month. However, if you wait until mortgage rates go back up to 6.25% that payment becomes $2225. per month – an increase of about $250 per month. *Private mortgage insurance is usually about .01650% ($5940[partly refundable]) added to the mortgage amount would result in a premium of $147 until your LTV drops to 80% or more. The your payment would end and you would receive a refund on the balance of the PMI.
Look at the difference in what you can purchase. What are you buying? Are you buying a home that you can move right into? Or are you buying a home that will need either your manual labor or someone else’s (more expensive of course) for the next several years to bring it up to a livable condition? HOW MUCH REPAIR WILL THE HOUSE NEED? And can those additional dollars be mortgaged? Now we have other theories to evaluate and research to do.
These are all questions that you might not think to ask on your own. A buyer’s agent will help you think of the things that will be important to the purchase and occupancy of your home. For an exercise – on your own or responding to this article, pick a home from . Then, please outline the steps that you think it will take to purchase that home. I’ll give you the full process in another article in about 1 week.

Friday, January 16, 2009

Are You Afraid to Buy?

The number one reason why people are afraid to buy now is the uncertainty in the economy. Yes, all indicators are that we are in a particularly downward time in our economy -- job layoffs, bank and auto industry bailouts are a mess. I think that the media can frighten us into reacting and not moving forward with our own plans for the future.

However, this is the time that the qualified buyer has the power to purchase whatever he wants. We have the lowest mortgage rates in history, prices have dropped to 2002 prices and banks have money to lend. SELLERS ARE MOTIVATED. A first home or a vacation home is an investment in your future. What does the buyer need to do so?
1. Excellent credit and income sufficient to pay the mortgage.
2. A deposit, equity in another home, or stock or bond certificates to trade.
3. Contact to begin your search for the best property for you.

Monday, January 12, 2009

Winter is home improvement time! Do you have a paint job in mind?

This guide can be a helpful way to brighten your spirits. Just remember if you plan to sell your home, don't come on too strong! Just a hint of color in a neutral paint can make a big difference in the feeling of your house.

Warm colors, like red, orange and yellow, evoke images associated with heat, such as sunlight and fire. Cool colors, such as blue, green and violet, are associated with landscapes and the ocean. The experts say knowing how colors affect you can help you determine which colors are best for your home. Research has shown that color can affect your mood, appetite and energy.

Red produces feelings of energy, passion and intimacy. It can raise your heart rate and blood pressure. Because it also stimulates the appetite, it’s a good choice for dining rooms.

Orange also warms a room but with less drama. It’s more friendly and welcoming than its fiery cousin. Orange works well in living rooms and family rooms as well as children’s bedrooms.

Yellow grabs attention and can lift one’s mood. It helps light up a poorly lit foyer or hallway. But yellow that is too bright or too strong can also create anxiety in infants, young children or the elderly.

Blue soothes and relaxes, so it’s an ideal bedroom color choice for adults and children. It also suppresses the appetite, which is why you’ll rarely see it in the kitchen or dining room.

Green is often associated with nature and is at home anywhere in the house. Light greens work well in baths and living rooms, and mid-range greens are a great accent for kitchens and dining rooms.

Violet gets a favorable response from children, but not from adults. Children’s bedrooms and play areas may be the best places to experiment with this color family.