Housing 2014

As the year 2013 ends - a great year for the housing in the country and even more so for the Boston area and its suburbs.
Last year, I had written that buyers who understand the true value will be able to buy but even I stand to be corrected and was proved wrong with a very strong buyers market. It was the Sellers market all the way and they were paid handsomely for putting their house during this year's Spring - Fall market. The buyers did not get a chance to think to make an offer - if they slept overnight on a house they had liked, it was already gone when they woke up. Even I was taken by surprise and shocked with the upward price movement in towns like Lexington, Newton, Winchester, Cambridge area.
Looking into 2014, I see this trend to continue with low inventory in high end markets with minimum impact of mortgage rates starting to  inch towards high 4's - 5's for a 30 year fixed mortgage as there are plenty of cash buyers out there.
And if these rates remain as I see them (high 4's)  - in communities like Acton, Westford, Burlington etc. the prices should remain stable/stay around 2013 prices, as the buyers capacity to purchase could be impacted.
Hoping for a happy 2014 housing hunt for buyers and Cheers once again if you happen to be a Seller this coming year.
Call me at 781 325 3938 for your housing needs in the Boston Area.

Housing Trends in 2013

Early January 2012, I had sent an email to my contacts, clients that the Spring market has come early this year.
The market started better than 2011 and remained strong in towns like - Lexington, Burlington, Cambridge, Boston - Back bay & Sea Front, Westford, Chelmsford, Winchester, Billerica to name few towns I helped my clients move and even all the Boroughs like Southborough, Northborough in metro-west area through out the year. The high end market over a million has bounced back.
My clients bought houses when they have been realistic to understand the value and see what the market has been willing to pay for a house. Others did not get the houses after making offers if they were in the 2011 time zone.
As we move into 2013, I expect the market to consolidate and remain strong as there will not be enough inventory, as of now mortgage rates remain low and could remain there for many more months.
There could be bidding for good houses. People have to realize the true worth and how much they want to pay versus how much they are willing to wait. It will be a very interesting year for the housing market.

Tax benefit for FIRST TIME HOME BUYERS - 2009

Congress Enacts Bigger and Better Home Buyer Tax Credit

A tax credit of up to $8,000 is now available for qualified first-time home buyers purchasing a principal residence on or after January 1,2009 and before December 1,2009.Unlike the tax credit enacted in 2008, the new credit does not have to be repaid.

FIRST TIME HOMEBUYER TAX CREDIT

As Modified in the American Recovery and Reinvestment Act

Major Modifications Italicized - February 2009

FEATURE	CREDIT AS CREATED JULY 2008 APPLIES TO ALL QUALIFIED PURCHASES ON OR AFTER APRIL 9,2008	REVISED CREDIT –EFFECTIVE FOR PURCHASES ON OR AFTER JANUARY 1, 2009 AND BEFORE DECEMBER 1, 2009
Amount of Credit	Lesser of 10 percent of cost of home or $7500	Maximum credit amount increased to $8000
Eligible Property	Any single family residence (including condos, co-ops, townhouses) that will be used as a principal residence.	No change. All principal residences eligible.
Refundable	Yes. Reduces (or can eliminate) income tax liability for the year of purchase. Any unused amount of tax credit refunded to purchaser.	No change. Purchasers will continue to receive refund for unused amount when tax return is filed.
Income Limit	Yes. Full amount of credit available for individuals with adjusted gross income of no more than $75,000 ($150,000 on a joint return). Phases out above those caps ($95,000 and $170,000).	No change. Same income limits continue to apply.
First-time Homebuyer Only	Yes. Purchaser (and purchaser’s spouse) may not have owned a principal residence in 3 years previous to purchase.	No change. Still available for first-time purchasers only. Three-year rule continues to apply.
Revenue Bond Financing	No credit allowed if home financed with state/local bond funding.	Purchasers who utilize revenue bond financing can use credit.
Repayment	Yes. Portion (6.67% of credit or $500) to be repaid each year for 15 years, starting with 2010 tax filing.	No repayment for purchases on or after January 1, 2009 and before December 1, 2009
Recapture	If home sold before 15-year repayment period ends, then outstanding balance of repayment amount recaptured on sale.	If home is sold within three years of purchase, entire amount of credit is recaptured on sale. Applies only to homes purchased in 2009.
Termination	July 1, 2009. (But note program changes for 2009)	December 1, 2009
Effective Date	Purchases on or after April 9, 2008 and before January 1, 2009. Repayment to begin for 2010 tax year.	All revisions are effective as of January 1, 2009

Stimulus Plan - Mortgage in MA

The conforming loan limit in most of Massachusetts has been increased from $465,750 to $523,750. However if you go over $417,000 there is 1 Point charge which can be paid upfront or built into your rate. This will make your rate rise about ½ Point but it is still much better than the normal jumbo rates. A mortgage broker/banker will give your more details.

Also this link I found on Yahoo helps you determine what future tax breaks you can expect. Even individuals in high tax brackets earning over 200K/year can expect to save over 5K.

http://finance.yahoo.com/taxes/article/106626/Your-Share-of-Stimulus-Tax-Breaks

Quote from Thomas Jefferson -1802

‘I believe that banking institutions are more dangerous to our liberties

than standing armies. If the American people ever allow private banks to

control the issue of their currency, first by inflation, then by

deflation, the banks and corporations that will grow up around (the banks)

will deprive the people of all property until their children wake-up

homeless on the continent their fathers conquered.’ The issuing power should be taken from the banks and restored to the people, to whom it properly belongs.

Thomas Jefferson - Letter to the Secretary of the Treasury Albert Gallatin (1802)
3rd president of US (1743 - 1826)

It is 200 years since..we just do not heed to History.

Another one that I found profound :

“It is dangerous to be right when the government is wrong” - Voltaire, 17th Century.

The World of finance - 401K & Housing

Is this title too complicated to understand? That's how I, and perhaps a million others feel in trying to keep up with today's ever changing times.
It is October 10th, 2008, and many of us wonder what turn the real estate market will take, as well as where our economy is destined to go.
One thing that occurred to me after watching the 401K lose value was that now, more than ever, it's safer to purchase a home than to have your money tied up in a 401K! The tax reductions you’ll receive will supercede what you’re not going to make on your 401K, and the home values will only increase.
Of course, there are lots of iiff's.... But where is the certainty? Let's find a home together so we can build equity and a brighter future!

Congress Passes Housing Bill

WASHINGTON -- U.S. Senate lawmakers on Saturday overwhelmingly passed a broad package of housing legislation, hoping to send a calming message to financial markets and voters amid the ongoing deterioration of the housing market and a growing number of bank failures.

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Meeting in a rare weekend session, the Senate voted 72-13 in favor of the bill, which includes tax breaks for homeowners, a $300 billion program to refinance loans for struggling borrowers, and a dramatic rescue plan for embattled mortgage finance firms Fannie Mae and Freddie Mac. Other provisions include an increase in the federal debt limit to $10.6 trillion and long-sought reforms to the Federal Housing Administration.

"For Americans out there today with distressed mortgages and worried about their economic future, we hope this legislation could be the first piece of good news in a long time," Senate Banking Chairman Christopher Dodd (D., Conn.) told reporters after the vote.

Treasury Secretary Henry Paulson said provisions in the bill dealing with Fannie and Freddie, including the creation of a new regulator, were especially important. "These components are orders of magnitude more important to turning the corner on the housing correction," Mr. Paulson said in a statement.

The vote completes congressional action on the legislation, which is the result of months of political wrangling and negotiations between the House and Senate, Treasury Department, and other federal regulators. The House voted 272-152 to pass the bill on Wednesday.

It will now be sent to President George W. Bush, who the White House has said will sign the bill despite voicing earlier misgivings about certain provisions of the legislation. Senate Majority Leader Harry Reid (D., Nev.) said Saturday the bill could reach the White House on Monday.

The White House has made no plans to have an official signing ceremony for the bill, though most major pieces of legislation typically receive such treatment. When asked about it Saturday, Mr. Dodd said he was disappointed and said a public ceremony with lawmakers and Mr. Bush would "reassure the American people we're on the job trying to make a difference."

"I think that's a moment you don't want to miss by just having a secret, closed-door signing ceremony as if you didn't do it," Mr. Dodd said. "I think it's more important for him to stand up and be heard on this and express through that office the importance of making a difference for people."

The presumptive presidential nominees from both parties weighed in following the Senate vote, though neither Sen. Barack Obama (D., Ill.) nor Sen. John McCain (R., Ariz.) attended the vote.

McCain spokesman Taylor Griffin said in a statement that "relief for struggling homeowners is overdue."

In a statement released by his office, Mr. Obama said the bill would help prevent hundreds of thousands of foreclosures and "provide critical support to communities that have been hard hit by the housing crisis."

Policymakers hope the wide-ranging bill will help invigorate a housing market that continues to collapse and has roiled financial markets worldwide. Data released in recent weeks reveal that home sales have hit a 10-year low and home prices continue to decline around the country. Importantly, the number of homeowners facing foreclosures continues to rise, raising the specter of vacant homes and neighborhood blight.

Foreclosure-tracking firm RealtyTrac said Friday that 740,000 properties received some form of foreclosure filing in the second quarter, a 14% jump from the previous quarter and soaring 121% from the second quarter of 2007. More breathtaking: One in every 171 households received a filing in the second quarter, and all but five of the nation's 100 largest metro areas experienced year-over-year increases.

The omnibus housing package completed Saturday attempts to deal with the housing crisis on a number of fronts. It includes $180 million for "pre-foreclosure" counseling for cash-strapped homeowners, creates an affordable housing trust fund to increase the supply of rental housing, and would raise the size of loans eligible for purchase by Fannie Mae and Freddie Mac to 115% of the local area median home price, with a nationwide ceiling of $625,000 for loans.

The centerpiece of the legislation is a program of up to $300 billion of FHA-insured mortgages to help refinance cash-strapped borrowers into affordable loans. The program would rely on lenders voluntarily writing down the value of a distressed loan for the homeowner to qualify for the new FHA-backed loan, and in return borrowers would have to share future price appreciation with the federal government.

Lawmakers hope the program will help avert foreclosures, with Democrats estimating it could help up to 400,000 borrowers that now face defaulting on their loans. To encourage lenders to work with borrowers, the legislation also provides some legal protections for mortgage servicers and lenders who modify the terms of loans.

Also included is an emergency plan authored by Mr. Paulson over the last two weeks to provide a federal backstop for Fannie Mae and Freddie Mac. Hatched in the wake of financial market concerns about the firms' solvency and capital, the plan would expand the $2.25 billion lines of credit the firms have with the Treasury, as well as allow the Treasury to take an equity stake in the government sponsored entities. Importantly, it also gives the Federal Reserve a "consultative" role to work with the firms' new regulator to ensure their safety and soundness.

It also includes tax relief for future homebuyers and current homeowners. First-time homebuyers purchasing a home between April of this year and through June of next year would receive a tax credit for 10% of the value of their home, up to $7,500, while current homeowners who do not itemize their tax returns would be able to deduct up to $1,000 for property taxes.

Other provisions include nearly $4 billion in grant money to state and local governments to buy up and rehabilitate foreclosed homes. Intended to avoid community blight in areas hard hit by foreclosure, the program directs that homes purchased through the program be offered to low- and moderate-income families.

Write to Michael R. Crittenden at michael.crittenden@dowjones.com²

By MICHAEL R. CRITTENDEN
July 26, 2008 3:05 p.m.