FSBO BLOG

According to 20-city index released Tuesday, from financial data company Standard & Poor’s and economists Case-Shiller, showed the value of U.S. homes grew on a monthly basis in May for the first time in nearly three years. “This could be an indication that home price declines are finally stabilizing,” said David Blitzer, chairman of the index committee S&P.  FSBO.com is seeing the rate of foreclosures slowing, the inventory of properties decreasing and the pending sales increasing. While the bad news has slowed down it will still take awhile for the upturn in housing to start. Remember our predicition on March 12th, 2009: “FSBO.com predicts the bottom in housing sales will be in the 4th quarter, 2009, as last minute buyers take advantage of the 1.tax credit expiring 12/31/09  2.low interest rates  3.depressed housing prices”  

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I need a new car, but I would like to own a house, which should I do first?  

The new government incentive ($4500) towards the purchase of a new car is very enticing. At http://www.cars.gov/ you can learn all about the new federal “cash-for-clunkers” program.  One suggestion, if you currently have a paid off ‘clunker’ and are thinking of getting a mortgage to buy that new house, better buy the house first. With no car payment it is easier to get the mortgage approved. If you buy the new car first and have a car loan, that payment works against you when applying for a mortgage.

With a ‘First Time Homebuyer credit’ and a “cash-for-clunkers” program, now is a great time to do something. Prices are down and so are interest rates.

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June 4 (Bloomberg) — Fixed U.S. mortgage rates jumped to the highest level this year, signaling the Federal Reserve’s plan to lower borrowing costs has stalled.  The average 30-year rate rose to 5.29 from 4.91 percent a week earlier, Freddie Mac, the McLean, Virginia-based mortgage buyer, said today in a statement. The last time the rate was higher was Dec. 11, when it was 5.47 percent. The average 15- year rate rose to 4.79 percent from 4.53 percent

The National Association of Realtors today, June 2nd, reported its seasonally adjusted index of sales contracts signed in April surged 6.7 percent to 90.3. It was the biggest monthly jump since October 2001. The mortgage markets are starting to see pressure to raise interest rates mainly because of the massive Federal Goverment borrowing. Banks are in better financial shape and are reluctant to lower the price of their REO properties. You better hurry if you plan to take advantage of low interest rates and low house prices. Remember what I wrote on March 12th, 2009: “FSBO.com predicts the bottom in housing sales will be in the 4th quarter, 2009, as last minute buyers take advantage of the 1.tax credit expiring 12/31/09  2.low interest rates  3.depressed housing prices”�

THE GOOD NEWS: The inventory of previously owned homes on the market dropped to 3.7 million in March from 3.8 million a month earlier and this is down from 4.6 million in the middle of 2008.

THE BAD NEWS: U.S. banks held $26.6 billion of repossessed real estate at the end of 2008, more than doubling from a year earlier, according to the Federal Deposit Insurance Corp. in Washington. The banking industry lost $26.2 billion in the fourth quarter, the largest loss in FDIC records.

Until the banks sell off this massive inventory, real estate sales will continue on the pace seen in the past six months.  Instead of giving the banks loans at less than 1% to prop them up, the Federal Government should offer to buyers of bank owned property mortgages at 1% through FNMA or FHA. Taking this property off the market will increase the value of properties owned by the general public and improve the balance sheets of the banks. It’s a ‘win win’ situation.

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FSBO.com has been getting a lot of calls this week on the $8,000 First-time Home Buyer tax credit being offered by the federal government through The American Recovery and Reinvestment Act of 2009.  Glad potential home buyers are taking notice to this awesome incentive!  Here are the most frequent questions being asked…

If I already filed my taxes for 2008, yet bought my home in 2009 when should I claim my credit?  You have two options if you have already filed your 2008 taxes.  From the IRS website…

Do I qualify for the tax credit if I buy the home from a relative?  From IRS Form 5405…”You cannot claim the credit if the following apply - You acquired your home by gift or inheritance or You acquired your home from a related person.  A related person includes: Your spouse, ancestors (parents, grandparents, etc.), or lineal descendants (children, grandchildren, etc); A corporation in which you directly or indirectly own more than 50% in value of the ourstanding stock of the corporation; A partnership in which you directly or indirectly own more than 50% of the capital interest or profits interest.”

I am buying the property with a person who is not a first-time home buyer nor is my spouse, but I am a first-time home buyer.  Am I still eligible for the tax credit?  Yes, you may depending on your specific situation. This notice from the IRS gives several good examples and further explanation.

Please visit the FSBO.com Tax Credit page for more information and links to other resources.  We recommend you consult a tax professional for more specific information that may pertain to you, as several states also have local policies.�

Thursday, March 12, 2009 AP Report: The average rate on a 30-year fixed mortgage slipped to $5.03 percent this week from 5.15 percent last week. A year ago, the 30-year fixed-rate mortgage averaged 6.13 percent.  “Mortgage rates had room to ease this week following news of a weaker jobs market, which may slow consumer spending and keep inflation at bay,” said Frank Nothaft, Freddie Mac’s chief economist.

FSBO.com predicts the bottom in housing sales will be in the 4th quarter, 2009, as last minute buyers take advantage of the    1.tax credit expiring 12/31/09  2.low interest rates  3.depressed housing prices

2010 will see a return of 6% mortgage rates, higher home prices and reduced inventory.   

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2 out of 3 cities in the US are seeing their revenue in decline according to a recent survey  by U.S. League of Cities. Cities and towns need to raise rates after their main sources of income — sales, income and property taxes — declined together in 2008 for the first time in 12 years, the League of Cities survey said. Assessed value you pay your taxes on went up while market value went down is a growing problem for homeowners. It’s time to contact your local assessors office to review your value. Who’s done this? We know many investors owning several properties, that use FSBO.com to sell & rent their property, have quickly complained and requested a new assessment. Don’t delay!

Who’s done this?

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Home prices are falling for many reasons. One reason, is the increasing number of Bank owned real estate (REO properties) on the market for sale at low prices and getting reduced even lower. In an attempt to slow down the number of new foreclosed properties coming into the market for sale, the Federal Government has a new program as part of the ‘Financial Stability Plan’.  7 to 9 million homeowners may benefit from the Making Home Affordable program.

Click here for the ‘Government website’

Click here for the ‘Government Announcement’

Click here for the ‘Guidelines’

FSBO.com wants to know if you or someone you know will take advantage of this program and if you think this will help the current real estate environment?

First time homebuyer, defined as ‘not having owned a principal residence in the past 3 years’, now can receive a Federal Income Tax Credit of $8,000 (or 10% of purchase price, which ever is lower) when purchasing a primary residence in 2009. Some restrictions, such as: must own the property for three years, gross income restrictions apply, etc. If you do not owe $8000 in Federal Income Tax this year, the government will send you a check for the difference. Will this have the following effect on the housing market: 1. stabilize prices?  2. increase sales/reduce inventory?  3. reduce foreclosures? 4. improve the ability to get a loan?

Click here for more information - http://www.fsbo.com/tax-credit-85/