Real Estate and Real Life in the Wine Country

Reporting from Washington - If you’re thinking about applying for the new $6,500 home buyer federal tax credit or the extended $8,000 version, the Internal Revenue Service has just issued its first formal guidelines for you.

A great article in the Los Angeles Times: it is an easy to read outline of the new rules.

It is still a great time to buy but also a great time to sell with the tax credit for repeat home buyers. So you can sell your home and take advantage of the tax credit to buy your new home. The housing inventory in Sonoma County is so low, properties priced well sell fast and you are able to take advantage of the current market to move into your dream house.

  Mirjam

I am copying a posting from Kevin deBoer from 3 Oceans Real Estate. The link didn’t work but the info is interesting:

We are continuing to see the benefits of the current government programs to spur home sales across the country. Recent news that the $729,750 limit on conforming loans in our area has been extended into 2010, and that the government will continue to buy loans into 2010 have both contributed to increased sales and consumer confidence in our area, which means more buyers and sales. buyers+sales = Happy Realtors!

Even with those two incentives in place, there are some would-be-home-buyers that are still sitting on the fence. Here are two additional data points of interest:

Today the 10 year Treasury yield is at 3.2%. This indicator corresponds to mortgage rates – typically when it’s down, mortgage rates are down. Throughout this year rates have remained at historical lows; the average 10 Year Treasury yield for the last 12 months was 3.17%. However, the average yield over the last 10 years was 4.50%. In fact, from April 1953 to December 2008 the average annual yield for the 10 year Treasury was 6.36%. The highest rate during that 55 year period was 15.32%; the lowest rate was 2.29%. The high was attained in September of 1981. The low was achieved in April of 1954.

Translation: Evidence shows the 10 year Treasury yield and conforming mortgage rates are at historic lows; it’s unlikely they’ll continue in this range throughout 2010. How often does a 55 year interest rate low occur? About every 55 years!
According to the National Association of Realtors®, last month showed another big gain in existing-home sales, while inventories continue to decline.

Translation: the competition is getting tougher.

So, let’s see if all this “once in a lifetime” economic data, low interest rates, low prices, etc. are the bottom, or just the middle of the “double-dip recession” that the pessimists are talking about.

Mirjam