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Federal Tax Credit Extension & Expansion

President signs federal tax credit extension

President Obama on Friday, Nov. 6 signed a bill extending and expanding the Federal Tax Credit for Home Buyers. The bill passed the U.S. House of Representatives yesterday and the U.S. Senate late Wednesday.

The tax credit will be extended through April 30, 2010, with a 60-day extension if a binding contract is in place prior to the deadline. First-time home buyers will continue to receive a tax credit of up to $8,000, while existing homeowners will receive a reduced credit of up to $6,500. Existing homeowners will be eligible for the $6,500 if they have lived in their current residences for at least five years. The bill also will increase the qualifying income limits from $75,000 for single tax filers and $150,000 for joint filers, to $125,000 and $225,000, respectively. The purchase price of the home is capped at $800,000.

Under additional provisions in the bill, taxpayers can claim the credit on purchases completed in 2010 on their 2009 income tax returns. The bill maintains the provision that home buyers do not have to repay the credit provided the home remains their primary residence for 36 months after purchase, and waives this requirement for active duty military personnel who move due to a military order.

Entry-level housing affordability reaches 64 percent

Thursday, Nov. 12, 2009

Quick Facts:
· C.A.R. First-time Buyer Housing Affordability Index stood at 64 percent in the third quarter of 2009 compared with 55 percent (revised) in the third quarter of 2008
· The median price of an entry-level home in California was $247,150 in the third quarter of 2009
· The estimated monthly payment including taxes and insurance was $1,450 in the third quarter of 2009
· The minimum household income needed to purchase an entry-level home in California in the third quarter of 2009 was $43,500

C.A.R. reports entry-level housing affordability reached 64 percent in the third quarter of 2009

LOS ANGELES (Nov. 12) The percentage of households that could afford to buy an entry-level home in California stood at 64 percent in the third quarter of 2009, compared with 55 percent (revised) for the same period a year ago, according to a report released today by the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.).

C.A.R.’s First-time Buyer Housing Affordability Index (FTB-HAI) measures the percentage of households that can afford to purchase an entry-level home in California. C.A.R. also reports first-time buyer indexes for regions and select counties within the state. The Index is the most fundamental measure of housing well-being for first-time buyers in the state.

The minimum household income needed to purchase an entry-level home at $247,150 in California in the third quarter of 2009 was $43,500, based on an adjustable interest rate of 4.79 percent and assuming a 10 percent down payment. First-time buyers typically purchase a home equal to 85 percent of the prevailing median price. The monthly payment including taxes and insurance was $1,450 for the third quarter of 2009.

At $43,500, the minimum qualifying income was 19 percent lower than a year earlier when households needed $53,700 to qualify for a loan on an entry-level home. Recent decreases in home prices and mortgage rates have brought affordability into better alignment with income levels of the typical California households, where the median household income is $61,030.

The First-time Buyer Housing Affordability Index declined 3 percentage points in the third quarter of this year compared with the second quarter of 2009, due to a 10.2 percent increase in the price of an entry-level home.

At 85 percent, the High Desert region was the most affordable area in the state. The San Luis Obispo County region was the least affordable in the state at 47 percent, followed by the San Francisco Bay region at 49 percent.

Leading the way…® in California real estate for more than 100 years, the CALIFORNIA ASSOCIATION OF REALTORS® (www.car.org) is one of the largest state trade organizations in the United States with more than 167,000 members dedicated to the advancement of professionalism in real estate. C.A.R. is headquartered in Los Angeles.

C.A.R. First-time Buyer Housing Affordability Index

C.A.R. Region	Q3 2009	Q2 2009	Q3 2008
California	64	67	55	r
California – Condos	68	70	59	r
United States	76	76	70	r
High Desert	85	86	74	r
Los Angeles County	52	56	44	r
Monterey Region	66	71	54	r
Northern California	63	62	56	r
Northern Wine Country	58	59	52	r
Orange County	51	53	46	r
Palm Springs/Lower Desert	74	76	61	r
Riverside/San Bernardino	78	79	68	r
Sacramento County	78	79	72	r
San Diego County	56	59	51
San Francisco Bay	49	55	38	r
San Luis Obispo County	47	50	41	r
Santa Barbara Area	52	55	46	r
Santa Clara County	53	58	41	r
Southern California	64	67	54	r
Ventura County	56	59	53	r
County
Alameda	52	55	42	r
Contra Costa	42	43	33	r
Fresno	76	78	67	r
Marin	37	37	26	r
Merced	83	84	76	r
Riverside	78	79	68	r
San Bernardino	81	82	70	r
San Francisco	35	36	28	r
San Mateo	40	39	32	r
Santa Cruz	43	46	36	r
Sonoma	60	62	54	r

* -- percentage of California households that can afford to purchase an entry-level home

r – revised

Source: CALIFORNIA ASSOCIATION OF REALTORS^®

C.A.R. Region	Housing Affordability Index	Entry-Level Price	Monthly Payment Including Taxes & Insurance	Minimum Qualifying Income
California	64	$247,150	$1,450	$43,500
California - Condos	68	$224,000	$1,310	$39,300
United States	76	$151,220	$890	$26,700
High Desert	85	$96,190	$560	$16,800
Los Angeles County	52	$293,790	$1,720	$51,600
Monterey Region	66	$250,870	$1,470	$44,100
Northern California	63	$223,040	$1,310	$39,300
Northern Wine Country	58	$297,880	$1,750	$52,500
Orange County	51	$423,960	$2,490	$74,700
Palm Springs/Lower Desert	74	$139,400	$820	$24,600
Riverside/San Bernardino	78	$142,840	$840	$25,200
Sacramento County	78	$158,620	$930	$27,900
San Diego County	56	$321,420	$1,890	$56,700
San Francisco Bay	49	$457,400	$2,680	$80,400
San Luis Obispo County	47	$330,590	$1,940	$58,200
Santa Barbara Area	52	$330,480	$1,940	$58,200
Santa Clara County	53	$481,100	$2,820	$84,600
Southern California	64	$245,130	$1,440	$43,200
Ventura County	56	$385,910	$2,260	$67,800
County
Alameda	52	$392,860	$2,300	$69,130
Contra Costa	42	$533,310	$3,130	$93,840
Fresno	76	$126,670	$740	$22,290
Marin	37	$682,660	$4,000	$120,120
Merced	83	$94,050	$550	$16,550
Riverside	78	$147,780	$870	$26,000
San Bernardino	81	$125,250	$730	$22,040
San Francisco	35	$579,510	$3,400	$101,970
San Mateo	40	$603,500	$3,540	$106,190
Santa Cruz	43	$442,000	$2,590	$77,770
Sonoma	60	$306,100	$1,800	$53,860

Source: CALIFORNIA ASSOCIATION OF REALTORS^®

Tax credit can be used as additional down payment

Qualified, first-time home buyers using a Federal Housing Administration (FHA)-insured mortgage now can apply the $8,000 federal tax credit toward their down payments, the Dept. of Housing and Urban Development (HUD) announced today.

Currently, borrowers applying for an FHA-insured mortgage are required to issue minimum down payments of 3.5 percent. Previously, FHA-approved lenders were not allowed to monetize the tax credit as part of the 3.5 percent; however, under the new guidelines announced this afternoon, borrowers now can use the tax credit as additional down payment, or for other closing costs.

C.A.R. has been informed that no lenders in California are offering the monetization of the tax credit. C.A.R. will continue to follow this issue and work to convince lenders to make these products available to borrowers.

October sales and price report

Wednesday, Nov. 25, 2009

C.A.R. reports October home sales increased 1 percent; median home price declined 3.2 percent

Multimedia:
· Click here to view Unsold Inventory by price point
· Click here to view a data table comparing peak prices and current prices in areas throughout the state

Quick Facts:
· Existing, single-family home sales increased 1 percent in October to a seasonally adjusted rate of 562,400 units on an annualized basis.

· The statewide median price of an existing single-family home increased 0.3 percent in October to
$297,500, compared with September 2009.

· C.A.R.’s Unsold Inventory Index fell to 4 months in October, compared with 6.1 months in October 2008.

LOS ANGELES (Nov. 25) – Home sales increased 1 percent in October in California compared with the same period a year ago, while the median price of an existing home declined 3.2 percent, the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) reported today.

“Home sales historically trail off during the fall and winter months as we move to the off-peak season for the housing market,” said C.A.R. President Steve Goddard. “However, with affordable home prices, mortgage rates hovering around 5 percent, and the extension and expansion of the federal tax credit, we expect first-time and move-up home buyers to drive home sales through the end of this year and into early 2010.”

Closed escrow sales of existing, single-family detached homes in California totaled 562,400 in October at a seasonally adjusted annualized rate, according to information collected by C.A.R. from more than 90 local REALTOR® associations statewide. Statewide home resale activity increased 1 percent from the revised 557,050 sales pace recorded in October 2008. Sales in October 2009 increased 5.9 percent compared with the previous month.

The statewide sales figure represents what the total number of homes sold during 2009 would be if sales maintained the October pace throughout the year. It is adjusted to account for seasonal factors that typically influence home sales.

The median price of an existing, single-family detached home in California during October 2009 was $297,500, a 3.2 percent decrease from the revised $307,210 median for October 2008, C.A.R. reported. The October 2009 median price rose 0.3 percent compared with September’s $296,610 median price.

“California’s median price rose for the eighth consecutive month in October and sales continued to show strength, signs that California has hit and passed the bottom of this real estate cycle,” said C.A.R. Vice President and Chief Economist Leslie-Appleton-Young. “The number of distressed sales as a share of total sales has shown considerable improvement since the beginning of the year, as a result of loan modifications and other efforts to prevent troubled mortgages from going into foreclosure. This has led to a decline in inventory levels since the start of the year that is more consistent with the price gains we have seen in recent months.

“For the first-time since July 2007, sales of homes priced $1 million or more rose in year-to-year comparisons,” said Appleton-Young. "While this is a welcome sign, the high end continues to be constrained by the lack of available financing in this sector.”

Highlights of C.A.R.’s resale housing figures for October 2009:

. C.A.R.’s Unsold Inventory Index for existing, single-family detached homes in October 2009 was 4 months, compared with 6.1 months (revised) for the same period a year ago. The index indicates the number of months needed to deplete the supply of homes on the market at the current sales rate.

. Thirty-year fixed-mortgage interest rates averaged 4.95 percent during October 2009, compared with 6.20 percent in October 2008, according to Freddie Mac. Adjustable-mortgage interest rates averaged 4.55 percent in October 2009, compared with 5.21 percent in October 2008.

. The median number of days it took to sell a single-family home was 34.1 days in October 2009, compared with 45.5 days (revised) for the same period a year ago.

Regional MLS sales and price information are contained in the tables that accompany this press release. Regional sales data are not adjusted to account for seasonal factors that can influence home sales. The MLS median price and sales data for detached homes are generated from a survey of more than 90 associations of REALTORS® throughout the state. MLS median price and sales data for condominiums are based on a survey of more than 60 associations. The median price for both detached homes and condominiums represents closed escrow sales.

In a separate report covering more localized statistics generated by C.A.R. and DataQuick Information Systems, 78 of the 391 cities and communities reporting showed an increase in their respective median home prices from a year ago. DataQuick statistics are based on county records data rather than MLS information. DataQuick Information Systems is a subsidiary of Vancouver-based MacDonald Dettwiler and Associates. (The lists are generated for incorporated cities with a minimum of 30 recorded sales in the month.)

Note: Large changes in local median home prices typically indicate both local home price appreciation, and often, large shifts in the composition of housing market activity. Some of the variations in median home prices for October may be exaggerated due to compositional changes in housing demand. The DataQuick tables listing median home prices in California cities and counties are accessible through C.A.R. Online at
http://www.car.org/economics/historicalprices/2009medianprices/oct2009medianprices.

. Statewide, the 10 cities with the highest median home prices in California during October 2009 were: Palo Alto, $1,639,550; Los Altos, $1,592,550; Manhattan Beach, $1,037,500; Cupertino, $1,030,000; Newport Beach, $935,000; Los Gatos, $920,000; Rancho Palos Verdes, $900,000; Santa Barbara, $897,500; Lafayette, $867,500; and Santa Monica, $786,000.

. Statewide, the cities with the greatest median home price increases in October 2009 compared with the same period a year ago were: Palo Alto, 49.1 percent; Atascadero, 33.3 percent; Cupertino, 24.2 percent; San Rafael, 24 percent; Emeryville, 22.2 percent, Livermore, 20.5 percent; Culver City, 19.4 percent; Pleasant Hill, 17 percent; La Habra, 16.2 percent, and Novato, 15.4 percent.

Leading the way...® in California real estate for more than 100 years, the CALIFORNIA ASSOCIATION OF REALTORS® (www.car.org) is one of the largest state trade organizations in the United States, with more than 163,000 members dedicated to the advancement of professionalism in real estate. C.A.R. is headquartered in Los Angeles.

Conforming loan limits extended through 2010
Friday, Oct. 30, 2009

Extension of conforming loan limits through 2010 earns praise from C.A.R.

LOS ANGELES (Oct. 30) –The U.S. Congress late yesterday passed a congressional resolution extending through 2010 the current conforming loan limits of $417,000 for most areas in the U.S. and $729,750 for high-cost areas, including many in California. President Obama is expected to sign the resolution today or tomorrow as part of a broader piece of budgetary legislation that will prevent a government shutdown.

The CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) and the NATIONAL ASSOCIATION OF REALTORS® (NAR) have long advocated making permanent higher conforming loan limits. As a result of C.A.R.’s and NAR’s efforts, a provision of the Housing and Economic Recovery Act of 2008 included temporarily raising the conforming loan limits from $625,500 in high-cost areas to $729,750 and extending the limits through 2009. Yesterday’s actions effectively extend the higher conforming loan limits for Fannie, Freddie, and FHA loans through 2010.

“There is no doubt that higher loan limits and the federal tax credit for first-time home buyers have helped stabilize California’s housing market over the last year,” said C.A.R. President James Liptak. “C.A.R. applauds our congressional representatives for their actions to extend the higher loan limits through 2010. They now should focus on making higher loan limits permanent.”

The conforming loan limit determines the maximum size of a mortgage that Government Sponsored Enterprises (GSEs) Fannie Mae and Freddie Mac can buy or “guarantee.” Non-conforming or “jumbo loans” typically carry higher mortgage interest rates than conforming loans, increasing monthly payments and hampering the ability of families in California to purchase homes by making them less affordable.