President Obama Signs Bill Expanding Homebuyer Tax Credit

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Post Date:  November 6, 2009

President Barack Obama inked his approval of the bill extending and expanding the homebuyer tax credit incentive Friday morning.  The housing tax break, which was initially set to expire at the end of this month, is now available to buyers who sign a contract by April 30, 2010, and close by June 30.

The credit amount is based on 10 percent of the home’s purchase price. The maximum available to first-time buyers is $8,000. Other buyers, who’ve lived in their current residence for at least five years but want to relocate to a new primary residence can receive a credit of up to $6,500 – the incentive for these so-called “step-up” buyers will begin on December 1 of this year.

The income limits for both first-timers and step-up buyers is $125,000 for individuals and $225,000 for couples – up significantly from the current first-time buyer thresholds of $75,000 per individual and $150,000 per couple.

The tax break is only available on primary residences priced at $800,000 or less. Vacation or investment properties are not eligible. Beneficiaries who sell the home or stop using it as their primary residence within three years would be required to repay the credit.

“The rebound in the housing market was one of the big factors that contributed to the growth of the economy last quarter,” President Obama said at a national address in the White House Rose Garden Friday. “We want to give even more families the chance to own their own home.”

The expansion of the homebuyer tax benefit received widespread support from lawmakers, despite concerns over what it might cost the government in lost taxes.

The measure passed unanimously in the Senate earlier this week and cleared the House with a vote of 403 to 12.

President Obama assured the American people this morning that the homebuyer tax credit measure, which was attached to a larger bill extending unemployment benefits, would not increase the national deficit.

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UCLA Sees 16% home-price gain in 2010

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Post Date:  November 3, 2009

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Double-digit housing appreciation will return to Orange County next year, with the median home price rising somewhere from 15.9% to 16.6%, UCLA economists forecast in a report released today. Click on charts above to enlarge!

That compares to a projected 8.8% gain in California next year and a 2.4% increase nationwide.

It also differs sharply from Cal State Fullerton’s outlook. An economist there said Tuesday that Orange County home prices will rise 2% to 3% next year – at most.

ucla-forecast-logoBut Mark Schniepp, author of UCLA Anderson Forecast for Orange County, said he’s not predicting the return of the housing bubble.

Even after six years of appreciation, UCLA economists still don’t expect home prices to reach the 2006 peak. In fact, home prices likely won’t get back to that level again until 2016 or 2017, Schniepp said.

“We’re already at 16% (appreciation) from March. That’s just six months, and I’m talking about a year-over-year (change),” said Schniepp, chief economist with the California Economic Forecast. “When you have a cycle where you’ve overcorrected, you can go up 16%. It doesn’t really mean much.

The gist of the forecast, Schniepp said, is that the Orange County housing market is in recovery.

“The train has left the station. It’s going down the track. This isn’t a head fake,” he said.

He added: “Now is the time to buy. (Actually), the time to buy was the spring and early summer.”

The UCLA housing forecast is part of an outlook that projects a jobs turnaround in O.C. in 2011.

In addition, the Orange County housing forecast states:

  • That from 2011 to 2015, O.C. home prices will increase by 2.5% to 8.7% a year. The median home price, at $406,481 this year, is projected to top $500,000 by 2011 and to be above $600,000 in 2015.
  • That foreclosures are expected to rise again early next year, but won’t derail the recovery.
  • That homebuilding this year will fall to 1,912 units, the lowest number in records dating back to 1946.
  • That homebuilding will pick up by 2012, rising above 11,000 units a year — levels not seen since 2002. In 2013, UCLA projects that housing starts will total 12,537.
  • That mortgage interest rates will remain low. Southern California rates likely will be below 6% through 2015, the forecast said.
  • That commercial real estate will be hampered by high unemployment through 2010, with recovery not expected until around 2011.
  • Office vacancies — currently at 18% to 20% — will start to drop in 2010, but lease rates won’t resume going up until 2011.
  • Retail sales are expected to start picking up in late 2010, aided by the recovery in the housing market.

“We do look for a much more robust recovery, certainly by 2011 and for homebuilding by 2012,” Schniepp said.

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