A Second Economic Stimulus Package????

This is a really interesting article from RealTrends.com regarding the possibility of a home buyer tax credit to reduce sales inventory and help spur the economy.

Homebuyer tax credit a possible way to reduce inventory

The idea of a second economic stimulus package is getting attention in Washington these days, and this one could have a provision to help more homebuyers. One proposal is to include a tax credit for buyers - a move that could help reduce the large amount of housing inventory currently on the market. A similar plan was put in place to clear out inventory in the 1970s, according to the National Association of Home Builders.

Help for first-time buyers is particularly important, said Lawrence Yun, chief economist for the National Association of REALTORS. More first-time buyers create a chain reaction in the market, allowing more current homeowners to trade up into their next home, he said. A tax credit for first-time buyers could give them a boost in confidence, counteracting their worries of home-price drops to come, he said.

"People will realize that the worst in housing is coming to an end if they see bold measures," Yun said in a telephone interview.

Can legislation actually work to reduce inventory? It has before, according to the NAHB. The group said that in 1975 - another time when inventories were high - a $6,000 home-buyer credit brought in a substantial flock of buyers, enough for builders to get back to business. (MarketWatch)

This is Soooo True......

Ever wonder what's really going on with our economy? Here's a humorous take on what the economists and analysts have to say....

A short concise view of where the economy is headed

After listening to economists and experts conjecture about the direction of the economy, a humorous summary is as follows:

What we have here is a continuing, but slowing, upward drive on the downside - which is better than a downward thrust on the upside, or even a sideways move on a U-shaped trough.

But, as the downside bottoms out, the resulting flat side of the up curve will strengthen any sideways movement still apparent in the recovery.

However, if the overshoot of incline produces a rising, but negative, slowdown in acceleration of the leading indicators, the resulting outflow could mean additional pressure from all sides of a circular demand curve.

taken from Realtrends.com

Update #2 on the Economic Stimulus Plan

Here's an article from the California Association of Realtors (C.A.R.), Newsline, Febuary 13, 2008 regarding the Economic Stimulus Package:

PRESIDENT SIGNS $168 BILLION ECONOMIC STIMULUS BILL
President Bush today signed off on the $168 billion stimulus package approved by Congress last week, which, in addition to tax rebates for millions of working Americans and business owners, includes a vital, but temporary increase in the conforming loan limit. The economic stimulus package will allow the Federal Housing Administration, as well as Fannie Mae and Freddie Mac to offer mortgages above the current conforming loan limit of $417,000 to as much as $729,750 in high-cost areas for loans originated between July 1, 2007 and Dec. 31, 2008.

"The actions of Congress and our president represent a significant victory for homeowners across the state and nationwide," said C.A.R. President William E. Brown. "C.A.R. has long fought for increases to the conforming loan limit in order to close the gap for would-be home buyers in high-cost areas, such as California, and, with the spotlight now fully shining on this important issue, will continue those efforts and push for permanent changes beyond Dec. 31."

To read the president's remarks regarding the signing of this bill, go directly to http://www.whitehouse.gov/news/releases/2008/02/20080213-3.html.

Update on the Economic Stimulus Plan

Here's a quick update on the Economic Stimulus Plan as it pertains to our housing market. Although the senate is still squabbling over the details, congressional insiders are expecting approval. The pending legislation will affect those areas with median home prices above $334,000 and the new limit for jumbo loans will be 25% higher than the median price up to $729,750. The chart shows median home prices for several metro areas including San Luis Obispo County and is taken from the Wall Street Journal, Thursday Feb. 7, 2008, Redefining Jumbo Loans.

Economic Stimulus Plan....Buyers get Ready

Here's an article from the California Association of Realtors, published a couple of weeks ago, that may bring you up to speed on the economic stimulus package that is currently being reviewed by the senate. It has passed in congress and if it's approved by the senate, it will be another great reason for buyers to make their move and decide to purchase. I'll keep you updated on if/when it passes.

Increasing conforming loan limits part of stimulus package

The U.S. House of Representatives unanimously approved a measure Tuesday that includes an increase in the conforming loan limits as part of a larger economic stimulus package. The measure would allow the Federal Housing Administration and Fannie Mae and Freddie Mac to issue mortgages above the current $417,000 level. Raising the conforming loan limits to more accurately reflect the cost of housing in California and other high-costs areas of the nation has long been an objective of C.A.R.

“While this measure is expected to face an uphill battle in the Senate, Tuesday’s action by the House represents a huge win for Californians and for C.A.R., which has fought aggressively for the increases for several years,” said C.A.R. President William E. Brown.

“For years, Chairman Barney Frank and I have worked to create affordable housing opportunities for families across the country by increasing the FHA and GSE conforming loan limits,” said Congressman Gary G. Miller, who has worked closely with C.A.R. to push for the reforms. “With the average home price in high-cost areas like California exceeding the current loan limit, homeowners and homebuyers in these areas have been unable to utilize these important federal housing programs. The loan limit increases included in the economic stimulus package will make safe, conforming mortgage loans available for homebuyers in all areas of the country.”

Currently, Californians are forced into more expensive non-conforming jumbo loans, decreasing homeownership opportunities for many and forcing others into more costly – and often riskier – loan products. Under terms of the proposed stimulus package, the conforming loan limit will be raised from $417,000 to as high as $729,750 in high-cost areas. The increases would only be valid through the end of the year.

While the House is hoping to send the measure to President Bush for signature by Feb. 15, the Senate is reported to be crafting a stimulus package of its own, including add-ons, which may result in delays. In addition, the Office of Federal Housing Enterprise Oversight (OFHEO) continues to oppose conforming loan limits reforms.

The House’s economic stimulus package also includes $500 million to support foreclosure mitigation counseling agencies across the country, many of which are currently short-staffed and overwhelmed by the rise in defaults.

Taken from www.car.org