Extension of $8000 Tax Credit--Now Also $6500 for Repeat Buyers

Update November 6th: This bill is now signed into law. The extension for this credit is until April 30, 2010, with a 60-day extension if a contract is entered into before that. First time buyers, this is your big chance! Repeat buyers who currently own now have a great incentive also!

The United States Senate passed a resolution on October 29th to extend the $8,000 first-time homebuyer tax credit originally set to expire on November 30. Once the Senate officially votes on the bill it will move to the House of Representatives, which strongly supports the extension. The Obama administration has also signaled its strong support for an extension of the tax credit.
Aside from the first-time homebuyer credit, the new plan would offer a $6,500 credit for repeat or move-up homebuyers who have lived in their primary residence for five years or more. The tax credits would be available to buyers who sign purchase agreements on a new or existing principal residence, not over a selling price of $800,000, between December 1, 2009 and April 30, 2010, and who will close escrow before June 30, 2010.

The income limits for all buyers would be increased from the present levels to higher incomes of $125,000 per year for individuals and $225,000 for married couples.
The first-time homebuyer credit is also available to those who have not owned a home in the previous three years. The credit does not have to be repaid unless the home is sold or ceases to be the primary residence within three years.
According to the Treasury Department, more than 1.2 million borrowers have claimed $8.5 billion of the $13.6 billion set aside for the first-time homebuyer tax credit.
A California Association of Realtors survey of first-time home buyers shows that 40 percent would not have purchased a home without the tax credit.

Are You Getting Your Garage Door Tax Credit?

Installing a new garage door will give your home a new and refreshing look to your Long Beach, Cerritos, Lakewood, Seal Beach and Los Alamitos home, in addition to giving you certain financial benefits. First of all, by enhancing the appearance of your property, you receive added value, and increased energy efficiency. Tax credits, as part of the February 2009 stimulus plan signed by President Obama, are allowed for installation of approved insulated garage doors on this list of manufacturers.

If your new garage door is installed in 2009 or 2010, you may be able to reduce your tax bill by $1500 with this tax credit or 30% of the product's cost. Among other requirements, the garage must be associated with your principal residence, and expected to remain in service for at least 5 years.

What a good way to add appeal and value to your home, and receive a financial benefit in the tax credit and reduced energy costs at the same time. Many times when there are rooms next to or above a garage, they are the hottest in the summer or the coldest in the winter. These insulated garage doors reduce this inefficient escape of heated or cold air, making you more comfortable and paying less for it in hearing and air conditioning bills. There are a variety of styles to choose from, depending on your taste and color scheme. There is sure to be a door to complement the style of your home.

How Will Gustavo Dudamel Improve Your Neighborhood?

Last night’s live broadcast of a free performance of two major orchestral works performed by the Los Angeles Philharmonic at Walt Disney Hall conducted by the 28-year-old Gustavo Dudamel brought in a new wave—an electrifying wave of music and awareness that will pour over and affect even the most ordinary, the most musically uninitiated. This new conductor of the L.A. Phil, a former child prodigy who has already been professionally conducting orchestras for over 10 years, is a product of the music education program of his native Venezuela, known as El Sistema, the life work of Jose Antonio Abreu, a musician and Dudamel’s mentor. Venezuela’s state of musical affairs, 30 years ago, in the words of Abreu, was similar to how arts is and has been treated in this country:

"Music and art education were at that time confined to families who could afford to buy instruments. I felt that music education and art should be part of the patrimony of the whole country. From the beginning, I had the idea of inserting strong teachers in classrooms in sectors with dire social needs.

"In those cases, it's not just the lack of a roof or of bread, it's also a spiritual lack - a loneliness and lack of recognition. The philosophy of the system shows that the vicious circle of poverty can be broken when a child poor in material possessions acquires spiritual wealth through music. Our ideal is of a country in which art is within the reach of every citizen so that we can no longer talk about art being the property of the elite, but the heritage of the people."

Venezuela has had all the problems of children of poverty who are deprived with few opportunities for enlightenment. Does that sound familiar? Due to the initial and continuing work of Abreu, government backing and funding of $29 million supplies the funding for a program that involves children everyday in learning classical music from 2 pm to 6 pm, the prime hours our children are left alone without supervision and to get into possible trouble.

Other countries, including the UK, are introducing similar programs. California, its legislators and its schools, need to stop pushing away music education and the arts, they need to stop viewing them as a secondary and insignificant form of unnecessary learning. The mutuality in the Venezuelan system, the emphasis on achievement involving "team" support with parental involvement, providing a lot of opportunity to be the best you can, not necessarily a prodigy, seems to be producing confidant and high achievers in the Venezuelan system whether inside of or away from the field of music. In the words of Jose Antonio Abreu, we too have many children with a lack, a lack of recognition, a lack of identity, and whose loneliness is preyed upon by those who lead gangs and recruit for them, where the end result is crime and more money spent on a large prison population. The study and performance of music and the arts is not for the isolated few, it should be an opportunity for everyone. Right now, gang involvement is an equal opportunity factor in every public school for most, if not all, children in this country, with a tremendous social and financial cost to its citizens. This country, and California, now needs to give other forms of learning and advancement equal opportunity to its masses. It needs its own El Sistema.

While there is no space here to include a full discussion of the postive effect of music on learning, and on the brain, be rest assured it does. The study of music encourages and requires physical and mental coordination, enables poor readers to read better, requires certain math skills, and then gives that music student a worthy goal for which to strive. Wouldn't you like to have that child growing up near you, knowing he or she is living with a productive purpose and the means to do so?

Long Beach Residential Inventory Decreased by 50%

The September graph, shows for a one-year period, the number of for sale residential properties throughout the City of Long Beach (single family houses, condos and lofts). In September 2008, there were 2,265 properties on the market; in September 2009, there were 1,247.

The overall Long Beach months supply of inventory in the same period decreased from 7 months in September 2008, to 2 months in September 2009. In other words, at the present rate of sale, all existing inventory would be sold in two months.

Able and Baker, Two People in the Subprime Economy

Here's what I found in my e-mail today:

Let’s discuss two California families and the real estate market. We’ll call them Able and Baker.

Able sold a home at the top of the real estate market for $500,000 and bought a new home for $800,000, paying 10% down and getting a new adjustable rate mortgage for the remainder. Baker stayed in their existing $500,000 home and we all applauded Able for selling at the top of the market.

There are many different opinions on the amount of the drop in prices but we can all agree prices have dropped, more in some areas than others. For our example, we will use a simplified 35% drop on all homes.

Today, Able is in their home with a loan still around $720,000 and can’t refinance because their value is $520,000. Their property taxes are still hovering around $8,000 per year (my note: but does he know about property tax reduction offered by the county?). This is called being underwater, and they could be facing tax problems because of forgiveness of debt, etc.

Baker decides to sell today and finally move up to a bigger home. Their home has dropped in value and they think they have suffered a loss of $175,000 as the home is worth only $325,000. They sell and buy the former $800,000 home for $520,000. They get a loan for $468,000 at the current rate of under 5% and their taxes will be about $5,200 per year.

They might also qualify for a $8,000 tax credit and other inducements in today’s market. Also, there could be appreciation as the market recovers and would you rather have appreciation start now on a $325,000 home or a $520,000 home? Plus they’re living in their move-up home and the family is happy. So, who is better off now. Able or Baker?

Do you think we're at the bottom of the market?

See http://www.juliahuntsman.com/ for property searches.

Thinking Green: Using Light Colored Roofing and Paint

In a visit with one of my past clients today (who painted his roof white after his house closed escrow over 10 years ago), it came as a revelation that California has passed a law effective July 1, 2009, that residential roofs on new construction, both flat and sloping, must be re-roofed with a white or light material. Actually, the law for a white flat roof has been in effect since 2005. See this article provided through the California Energy Commission.

The argument is of course for energy savings, and reflects a practice long used in ancient societies that populate hot climates where light or white clothing is standard practice, and whitewash is used on all structures. The cooling effect has long term energy savings implications, especially for the Western states, and especially for California where energy conservation is fast becoming an outright demand. A California Energy Commission board member states that it has long been known that white-roofed buildings stay cooler in hotter weather:

"painting urban surfaces in warm parts of the world white or a light color could offset the carbon emissions of all 600 million of the world's cars for 18 to 20 years — at a savings equivalent to at least $1 trillion worth of CO2 reductions."

"It turns out that they cool the air outside of their walls, too. On a typical summer day, Los Angeles is 5 degrees warmer than surrounding areas, and studies have consistently shown that by far the largest factor in this discrepancy is the absorption of solar heat by dark roofs and pavement — a phenomenon known as the "urban heat island" effect."

So far, this law affects new construction, but doesn't it make sense to apply these principles to existing structures wherever possible? Rethinking guidelines for historic homes might be in order.

Your Southern California Housing Trends Report

A new report -- click on the banner for your 1 Minute Housing Market, video report, metropolitan area quarterly and monthly prices, information on local Southern California prices by city, daily update reports, national housing trends, statistics and demographics, and more consumer articles!

Five Principles of Home Staging

Home staging is economical and a well-proven benefit to Realtors and home owners alike. Here are some basic staging principles every home seller can use:

Become a Seller, Not a Dweller
Homeowners must make the mental shift necessary to become Sellers, not Dwellers. It is only then sellers are able to realize they own a commodity to be sold and no longer their home. The way we live in our homes is different than the way we sell our homes. With this mental shift in place, the next step in the process may begin.

Clean and De-clutter
De-cluttering is the first principle used in home staging. Clutter is defined as those items in a room that are not necessary for its function or beauty. Clutter can be too many books, knickknacks, or accessories. With staging, only key accessories and furniture remain. The property will immediately appear more spacious and well cared for.

Here are some tips to keep in mind as it applies to de-cluttering:
A buyer wants to purchase a move-in ready home. A house that is not clean implies deferred maintenance.
A buyer is purchasing square footage. Clear the clutter to create the impression of more space.
Let the light in; buyers are drawn to open, airy spaces.

Appeal to the Masses
With the de-cluttering process accomplished, the next phase is depersonalizing. The buyer will want to mentally personalize it and imagine living in the house when it becomes theirs. This includes using neutral tones throughout as well as general updates which will appeal to the largest segment of potential buyers.

Realtors no longer have the almost impossible task of telling homeowners their faux finished pink bathroom really needs a neutral tone of paint (put in before and after of pink bathroom) or their beloved collection of gargoyles will turn off potential buyers.

If You Can't See It, You Can't Sell It.
Curb appeal is everything. It's the first impression a potential buyer gets of the home. Remember, if you can’t see it you can’t sell it. The easiest and best way to determine what needs to be done to the outside of the home and the lawn is to walk across the street. Look objectively at what the home looks like from that vantage point. Then, take the following curb appeal test:

1. Are the gutters clean and in good repair?
2. How does the driveway look?
3. Do the shrubs need pruning?
4. Do the trees need trimming?
5. How do the flower beds look?
6. Is the walkway leading to the house inviting?
7. Does the lawn look clean and neat?
8. Are the house numbers clearly visible?
9. Does the entryway and front door make a great first impression?
10. Are toys, tools, hoses and any other distracting items put away?


It is only after answering and addressing the above curb appeal issues that the seller will have passed the “curb appeal test.”

Maximize Strong Points; Minimize Shortcomings
Finally, it’s important to show off the home’s best features, while hiding its flaws. Showcase focal points such as fireplaces, wood floors, and expansive views and divert attention away from less attractive features by creating alternate interest.

If a home seller is willing to follow these simple steps – clean and de-clutter, depersonalize, increase curb appeal and maximize the home’s strong points - they greatly improve the chances of selling their home quicker and for top dollar.

Amie Hebert Chaney, a Home Staging Expert (HSE), says Home Staging is the art of preparing a home for market to give the best possible first impression to potential buyers, resulting in a quicker sale and higher profit. The intent behind home staging is for potential buyers to be able to see the home as theirs. Copyright© 2008, Amie H. Chaney. All right reserved. For information contact FrogPond at 800.704.FROG(3764) or email susie@FrogPond.com.

Long Beach, Cerritos, Lakewood Unsold Inventory Index in Steady Decline

The residential inventory in many areas of Long Beach is steadily declining, as of today in Long Beach, there are 831 single family homes and condos listed as "active" in the MLS (down from about 870 just a few weeks ago), with 775 in escrow.
Cerritos has 66 active residential listings, and has 67 in escrow.
Lakewood has 99 active listings, and 148 residential properties in escrow.

The gap of available properties is closing.

The median price statewide has increased for the 5th straight month, as sales in lower priced inventory has dropped, and more sales occurred in the upper ranges.

While the suspense concerning future inventory continues, as the home supply backlog grows, it's important to keep in mind: nobody knows for certain how and when and where the increase in inventory will happen.

Per the California Association of Realtors August report:

"With inventory levels well below the long-run average, a supply shortage at the low to middle-tiers may have constrained sales in lower-priced homes and led to an increase in the median price. The supply of homes is expected to increase later this year as the number of foreclosures continues to rise from last year. However, the government and lenders’ efforts in modifying loans, combined with delays in processing the backlog of delinquencies may ease the number of defaulted loans, thus making a prediction on the number and timing of the flow of distressed properties less certain."

Find a residential or investment property through the MLS search.

Moving Forward or Still Going in Circles?

With more properties now receiving offers within days coming on the market, multiple offers, and selling over list price, at least some smart buyers are beginning to understand a current reality. They are having to compete against investors, or against other buyers who have more cash than they do. The days of casually looking, window shopping and low-ball offers should be left behind as quickly as possible. Thinking that the mountain will come to Mohammed, as wishful thinking takes over pricing reality, should be done with. It is time to stop moving in circles, the one where offers are made, lost in the multiple offer shuffle, then repeated again at the next property where the cycle repeats itself, over and over again.

It is time to move forward.

It is time to make the winning bid. To make the winning bid, a realistic property has to be chosen, and that realistic property may be one which doesn't look so attractive initially, but is in the right area, and for which suitable financing is available. Perhaps it will require a higher down payment, or an FHA rehab loan. Otherwise, choosing the price you want in an area you don't really feel certain about, and then expecting the seller to reduce the price to your lowered expectations, is sheer folly. It is time to move forward.

There's been much talk about the REO properties that will hit the market, perhaps before the end of this year. And will they bring a new low in bargain prices? That's the way many buyers continue to act. But there's so far been evidence supporting stabilization in prices, if not a regional increases in price. A 3% increase in the West according to the Clear Capital Home Data Index report discusses how the momentum built in recent months could carry over into REO properties placed on the market in the future as buyers worry they are missing out on the bottom of the market.

The time for the $8000 tax credit is still in effect until December 1, 2009. Whether you're interested in houses, condos or units, please contact me. I can help you move forward.