An update just came across my Twitterfeed that the AP and The Washington Post are reporting that the house and senate have reached a “compromise “on the stimulus package and that the much touted $15,000 tax credit, which has been the buzz of real estate consumers and agents the last week or so, is not to be. AP Special Correspondent DAVID ESPO reports that
Working to accommodate the new, lower overall limit of the bill, negotiators effectively wiped out a Senate-passed provision for a new $15,000 tax credit to defray the cost of buying a home, these officials said.
Last Friday Steve over at DirtRichTv.com published an interesting take on this amendment. If you were on the fence about purchasing until you knew what exactly the outcome was for this tax credit, it looks like this is one issue you can cross off the list for now. The always insightful and entertaining Jay Thompson over that the PhoenixRealEstateGuy has been following this closely and I suggest reading his coverage of these unfolding events.
Unfortunately there is still an affordability issue for first time buyers here in Northern NJ. With the disapperance many of the private sector jobs, some of the highest taxes in the country and tightening of lending, most first time buyers are being required to put down 20% or go with FHA loan that will allow for a 3.5% down payment. Many potential purchasers are hearing that rates will be legislated to 4.5% (that was defeated) or fall to 4% based on market forces. Going the FHA route means that the borrower will have a higher rate, while still low in a historical perspective many are fixated on the elusive 4% or 4.5%. Many are “waiting for the bottom” and some have even called it. We have been lucky in that this cycle had come to the towns along the midtown direct in the last 6 months. The New York City buyer has cushioned the decline in prices relative to the western part of the state. Now that the financial sector has been decimated (yes there are still bonuses, even if some were paid with taxpayer funds) prices will continue to fall until job stability and creation comes back to the tri-state area. Many a first time buyer will sit on the fence waiting for the “bottom”, or 4 % mortgage rates, or Mercury and Venus to align and without them there are no moves up and the whole thing grinds to a halt. We need the first time buyer back in the market otherwise God help us all.
H/T to Jay Thompson of PhoenixRealEstateGuy and David Gibbons of Zillow
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