Great overview of the Pasadena Real Estate Market for the first week of February 2010 from our lender, Larry Butler, of First Capital. Enjoy – C.

Rates continue to hold under the 5% mark. These low rates and the coming expiration of the 1^st time buyer tax credit April 30, should really get the spring buying season off to an early and strong start. Get your buyers pre approved and ready to go. 

Another important note for the week – Pending Home Sales for December were up significantly from November’s reading, and up a healthy 10.9% over December 2008, as homebuyers take advantage of today’s low rates and tax incentives.

And speaking of low home loan rates, the Federal Reserve purchased $12 billion in Mortgage Backed Securities last week, bringing the total to $1.173 trillion since the program began in January of 2009…which leaves just $77 billion in purchases to be made over the next eight weeks until the program ends on March 31^st.

While home loan rates improved very slightly during this volatile week – don’t forget that when the Fed is done buying, home loan rates will be very susceptible to moving higher.

Remember: Weak economic news normally causes money to flow out of Stocks and into Bonds, helping Bonds and home loan rates improve, while strong economic news normally has the opposite result.

This is an excerpt from the First Capital newsletter, committed to keeping you updated on the economic events that impact interest rates and how they may affect you.

Larry Butler 
15 East Foothill Boulevard

First Capital

Arcadia, CA 91006

626/821-1257 

Post from: Buy Pasadena Real Estate

I wanted to share these questions and answers from the National Association of Realtors (NAR) received on November 5, 2009, concerning possible changes to the Home Buyer Tax Credit in order to help you further understand what may soon be available for you.

National Association of REALTORS® Government Affairs Division, November 5, 2009

Question: Existing homeowner credit: Must the new house cost more than the old house?

Answer: No. For example, individuals who move from a high cost area to a lower cost area who meet all eligibility requirements will qualify for the $6500 credit.

Question: I am an existing homeowner. On October 25, 2009, I signed a contract to purchase a new home. I have lived in my current home for more than 5 consecutive years and am within the new income limits. I will go to settlement on November 20. If President Obama has signed the bill by the time I go to settlement, will I qualify for the new $6500 tax credit?

Answer: Yes. The existing homeowner credit goes into effect for purchases after the date of enactment (when the bill is signed). There is no reference to the date of contract for the new credit. The provision looks solely to the date of purchase, which is generally the date of settlement.

Question: I am a first time homebuyer but was not within the prior income limits at the time I entered into my contract to purchase on October 30, 2009. I will be covered, however, by the new income limits. If the new rules have been signed into law by the time I go to settlement, will I be eligible for a credit?

Answer: Yes. The new income limitations go into effect as soon as the President has signed the bill. The income limit and other eligibility rules will look to your status as of the date of purchase, which is the settlement date. So if the new rules have been signed when you go to settlement, you should be eligible for the credit (or a portion of the credit if you’re within the phase-out range).

Question: I am an eligible existing homeowner. I have a fair amount of equity in my home. I have found a home with a nonnegotiable price of $825,000. Will I be able to use any of the $6500 tax credit?

Answer: No. The $800,000 cap on the cost of the purchased home is firm at $800,000. Any amount above $800,000 makes the home ineligible for any portion of the credit. The $800,000 is an absolute ceiling.

Question: I owned my home for 10 years, but sold it two years ago year and have been renting since. If I purchase a home, will I be eligible for the $6500 tax credit if I meet all the other eligibility tests?

Answer: Yes. Because you lived in the home for more than 5 consecutive years of the previous 8, you will qualify for the $6500 credit. For example, say John and his wife bought a home in 2000 and lived there until 2008 when he got a divorce. Whether John has been renting or bought in the interim, he WOULD INDEED be eligible for the credit because he owned a home and occupied it as his principal residence for 5 consecutive years out of the last 8 years. The keyword here is “consecutive.” As long as he lived in that house for 5 years straight, what he did since 3 years doesn’t impact eligibility.

Question: I am an eligible first time home buyer. I entered into a contract to purchase on November 1, 2009. Do I have to go to closing before December 1? How does the extension date affect me?

Answer: You do not have to close before December 1. Once the legislation has been signed, it will be as if the Nov 30 date had never existed. Therefore, so long as the contract settles before April 30 (or July 1, worst case), the purchaser will be eligible for the credit.

I also have additional information about the home buyer tax credit listed for you on the Buyers page. I will add information about the home buyer tax credit change as I receive it.

I invite your comments.

Cynthia

Post from: Buy Pasadena Real Estate

A. It’s all about getting into escrow as quickly as possible. Once you decide to put your house up for sale, you need to start seeing the property through the eyes of your potential buyer. By having your home professionally staged, it removes your emotion from the house and allows your potential buyer to emotionally connect to the house.

As the home owner, it’s especially hard to see where too much “stuff” gets accumulated: too much furniture in a room, too many toys in a child’s room, too many clothes in a closet, or even a wild “favorite” color on a wall that no one else seems to appreciate.

Staging helps a potential buyer visualize their furniture in your home. It will help speed the sale of your home to have as many personal items taken out of the house as possible. In fact, you’ll want your home staged before it’s placed in the MLS and the pictures are taken. This ensures potential buyers see your home for sale at its best.

A professional stager will help you determine what should be at least temporarily removed and stored off-site. Arrange the remaining furniture to give each room a purpose. It’s also important to ensure an easy traffic flow around the furniture.

Sellers can get a good start on streamlining their possessions by boxing items up and arranging furniture to create the easy flow throughout the house.

If you’re unsure of what to do, you can ask your realtor for a home stager, or see the real estate staging association (RESA) website to find a stager in your area.

 I invite your comments.

 Cynthia

Post from: Buy Pasadena Real Estate

In my opinion, this is a good time to buy real estate in the Pasadena area for the following reasons: 

• Prices are lower than they have been in the last 5 years.
• There are tax incentives for first-time buyers.
• Many home loan programs target just about every need.
• Interest rates are low compared to a couple of years ago.

Many people question if the market will go down even more before it comes back up. While no one has that magical crystal ball to see if we’ve reached rock bottom, I believe that we are close enough to the bottom to buy at a great price.

In fact, many people will find themselves meeting the criteria for a first-time buyer tax credit. Simply stated, a person is considered a first-time buyer if he or she has not had any ownership interest in a home in the three years previous to the day of the 2009 purchase. 

Especially in the Pasadena real estate market, there are many opportunities to buy an historic property. You may want to consider these benefits for buying a Pasadena historic property:

•  The option of putting the property on the Mills Act to recoup some of the taxes for the purpose of maintaining the property.
• The value of an historic property which is properly maintained is usually higher than a comparable property that is not.

I invite your comments.

Cynthia

Post from: Buy Pasadena Real Estate