Monday, February 16, 2009

Blessed Be the Tie That Binds...Housing to Stimulus...

You hear it everyday, you hear it on every media source and you hear it out of the mouths of anyone who is discussing the economy and how to bring it out of it's funk....You MUST fix housing before the economy begins to turn...

The question on everyone's mind is HOW to fix housing...do you:

Delay or stop foreclosures...the short term is that it allows folks to stay in their homes a bit longer while searching for work or trying to sell...the long term is that if the foreclosure is inevitable, meaning that the home has no equity or the person has lost their job, it is just a delay of the obvious problem...only exacerbating the total economic crisis...

Free up money and continue to lower rates...how low can you go? Good question, everyone thinking of buying a home seems to be waiting on this answer...rates may fall a bit lower, but as you can see, continuing to lower the rates simply hasn't had the effect that was predicted...rates are GREAT right now and folks are still waiting...for those who have good credit, money can be borrowed, but for those with credit issues, freeing up money will not benefit them as much because regulations are relatively stringent compared to years past, especially for non-conforming borrowers...

Tax Credit...the jury is still out on this one...sounds great, but how do you get the message out to folks? What is the story? Just what does a tax credit of $8000 or $15,000 mean to YOU? Good question. Until the credit unfolds or there is a stand-alone bill that allows any buyer to benefit with no income limits, it's going to be difficult to tell if this portion of the package is going to have a major effect...folks want to know how this helps them and how does it translate in to their personal budget at the end of the game.

Banks adding more resources/personnel...now there's an idea...it's extremely difficult to transact a short sale...not because the idea is so foreign and complicated, but because there is such a backlog with banks, that as an agent when we have a ready, willing and able buyer who presents an offer on a home that qualifies for a short sale, it can take MONTHS to process and go through the necessary hoops to even get a response, much less an actual offer worked out and closed...some of the stimulus money should be directed towards adding additional resources to expedite this process so that willing and qualified buyers can get some of the inventory off of the market, fix the home up and either live in it, rent it or put it back on the market at market value...

The National Association of Realtors, our State Association of Realtors and members of our local boards have been lobbying on behalf of homeowners and buyers everywhere, not to mention on behalf of the country as a whole, to lend insight to this issue and help in any way possible...some of the successes...

1-Loan limits were raised in order to accommodate higher valued areas (such as metro areas)

2-The tax credit was raised to $8,000 with NO PAYBACK (a real credit) for first-time buyers

3-Interest rates should come down a bit more as a result of foreclosure relief efforts

4-Over 50 billion dollars going towards foreclosure relief efforts (see results of this in #3)

So there you have it...just a few ways that housing has been and will be impacted by the recent stimulus package...I look forward to more to come...

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