SubscribeTax Credit Extended, Markets Further Stabilizing and Real Estate Ideal Hedge
November 11, 2009
Tax Credit and Conforming/FHA Loan Limit Extended
Made official on Friday, the tax credit for home purchases was extended through July 1, 2010 and the important details are exactly as they were in my post on Friday the 30th of October, which was summarized as follows:
· Effective on binding real estate contracts from December 1, 2009 through April 30, 2010, The tax credit would be $8,000 for first time home buyers and $6,500 for move-up buyers who have owned their current home for at least five years
· The tax credit expires on April 30, 2010; however, if a binding contract is reached by April 30, 2010, buyers have an additional 60 days to close the deal and still be eligible for the tax credit
· For purchases made in 2010, taxpayers would be able to claim the credit on their 2009 income tax return
· The income limits for both first time home buyers and move-up buyers would be $125,000 for single return and $225,000 joint return.
· Cost of the home may not exceed $800,000 to be eligible.
Remember that a tax credit has about THREE TIMES the impact of a tax deduction, which allows someone earning $125,000 per year to be taxed on about $102,000*. And since other items like interest and property taxes are also deductible*, that same individual may be looking at less than half of their earnings being fully taxable..!*
Add the above news to the fact HUD also extended the conforming loan limit of $729,750 in the Bay Area to December 31, 2010, and you have a “perfect storm” for every qualified first-time buyer in the Bay Area.
S&P Case-Shiller Confirming Further Improvement of Housing Prices
Released last week, the S&P Case-Shiller index confirms that housing prices continue to improve, especially in areas like San Francisco where the index moved another 2.8% in August to 132.47. This marks the seventh straight month of improvement.
Zillow also reported that their index reflected further stabilization for the third quarter, with over 26% of the metropolitan statistical areas showing signs of improvement.
Real Estate as an Ideal Hedge to Both the “W” Concern and Inflation
You may recall from my last post that we are seeing far more application activity for purchases in the $1mm+ range, especially the $1.5mm to $4mm range. These applications have been coming from our more financially-minded clients, as they not only see tremendous opportunity to obtain a more valuable home, but they are very concerned about a “W”-shaped economic recovery and subsequent inflation. As such, obtaining an upgraded home for less, cheap financing and hedging against inflation make buying a larger home an ideal move. All things being relative, the reality is that the S&P 500 currently has a rather high price-to-earnings ratio at about 19.52 versus the historical average of 15.7. As such, if we were in average economic circumstances, it’s arguable that the stock market is overvalued by about 25%. Given the fact that our current economy is FAR from being in average condition, it’s anyone’s guess just how overvalued the stock market is. All I know is that my savviest, financially-minded clients think that the stock market is due a correction and that real estate is a great asset to have as a hedge against both a market correction and inevitable inflation.
Fannie’s New Program: Deed for Lease
Announced on November 5, Fannie Mae is helping those qualified applicants to essentially sell and lease back their current home. This program is also applicable to investment-property owners who are facing foreclosure and wish to deed the property over to the lender and allow the renters to continue renting at market levels.
Rates and Activity
- Rates continue to run as low as 3.75%, depending on a number of different factors, with the conforming 30-year at just under 5% and the jumbo 30-year at about 4.75%
- 71% of our transactions last month were purchases, and the average loan was in the $500k range.
- As mentioned above, we’re seeing a heavy trend in purchase applications for the move-up market, but inventory is turning off a majority of those buyers
- We closed a deal in TWO weeks, but we still recommend a 30-day closing period
- If you or someone you know prefers to pay cash for a purchase, then finance that purchase within 90 days to protect valuable tax advantages, we can help, as we have programs that DO NOT require 6 months seasoning and pricing is based on purchase money, NOT a cash-out refinance
* Does not constitute tax advice. Please seek any qualified tax professional for proper guidance.
World’s First Virtual Open House
April 26, 2007
From 5pm to 7pm PST today, April 26th, 2007, I’ll be doing a twilight open house showing of 49 Missouri. Concurrently, I’ll be doing what may be the world’s first virtual open house.
Come by here to take a look, ask questions, find out more about the property, or just to say hi.
3Oceans Rises From the Depths
April 26, 2007
After a too-long blogging hiatus — brought on by a confluence of heavy work and personal commitments — I’m back…
One of the commitments keeping me busy was my “most Internet-marketed property…ever” listing. Let’s just say I underestimated how much time it would take to put property details up on some 80 sites…even though many of them auto-feed from Realtor.com But more on that later.
With the help of Jack Wimberly from West Valley Home Tours and the good folks from Wellcomemat.com I’m proud to unveil my debut acting appearance in a video segment about the listing, which is at 49 Missouri Street in San Francisco’s Potrero Hill neighborhood.
Holy Smokes, Batman, That Was Fast!
April 10, 2007
Within 3 hours after my post noting that, quite rightly, 3Oceans doesn't rank for the search term, "San Francisco Potrero Hill Real Estate" … Google has picked it up, and we're now at number 14.
Yahoo and MSN often take a bit longer to index new content, so for now we don't yet rank with them.
The power of good SEO…
Introducing The World’s Most Internet-Marketed Property: Come Along for the Ride!
April 9, 2007
I've been waiting for the right opportunity to really push the envelope of online real estate marketing, and, well, it's here!
I'm working on a listing in San Francisco's Potrero Hill neighborhood that fits perfectly into this new online marketing world: it's slick, chic, and contemporary, will likely attract a younger and web-savvy crowd of buyers, and the sellers simply love the idea of creating a buzz online.
We're passing on the normal full-color ads in traditional local media like the San Francisco Chronicle, the San Jose Mercury News, and we'll be spending that money online instead. To hedge our bets, we will be placing open house display ads in print media.
I'll be collaborating with several real estate online marketing companies to promote this property. They'll be showing me — and, by extension, my readers — how to get the full benefit of their products. I intend to chronicle our adventures here and invite you to follow along. If you have some ideas, feel free to join in!
I'll announce the first collaborator tomorrow.
In the meantime, as part of our adventures, let's see how high this site currently ranks for the search, "San Francisco Potrero Hill Real Estate" — I suspect it won't be that good, since I've never written about Potrero Hill before!
Sure enough, on Google, Yahoo, and MSN, I'm nowhere to be found, not even in the top 100. 
Google:
Yahoo:
MSN:
