Today the US Senate advances the new Stimulus Bill which includes an increase in the current home buyer tax credit.  Currently a home buyer purchasing a home from April 2008 to July 2009 may be entitled to a tax credit up to $7,500.  Currently the credit is to be paid back in increments of $500 each year thereafter.  The new Stimulus Bill proposes an actual tax credit of 10% of the sales price with a maximum of $15,000.  This provision may rid of the requirement to repay the credit, making it a true benefit for the home buyer.

In the article Senate Advances Tax Breaks for Homebuyers, Senator Johnny Isakson said,

“We do have a history in this country with housing and it goes back to the crash of 1974, which actually in terms of inventory and price declines was comparable to what’s happening now”.

“Within one year of the inception of that tax credit, two-thirds of the available inventory that was on the market was gone. The market moved back to a balanced inventory, values stabilized and things became very healthy. The only reason I know all of that is I was selling houses in 1974, that’s what I was doing to feed my family and make a living.”

The Stimulus Bill that was passed by the house last week will be reconciled with the Bill passed today and may have a final approval as early as Thursday February 5th.

Stay tuned for more information regarding this tax break.  Rates are still great and inventory is beginning to move again!

The real estate market across the country has had so much negative media lately that it is rare to hear anything positive.  With depreciation of home values at the top of the list it is hard to know how to have perspective on the information fed to us daily.  The Salem housing market obviously benefited from the housing boom in recent years – seeing double digit appreciation.  Fortunately, the appreciation numbers were not too abnormal and now the benefit shines through the negative attention towards the market.

I read in an article today at www.housingpredictor.com that Salem, Oregon is the 2nd hottest housing market in the US.  Housingpredictor.com places Salem in the 2nd position for forecasted appreciation in 2008 at 4.7%.

Although we’ve definitely noticed a slow down in real estate sales in 2008, it is important to keep the news we hear in perspective.  Now is a great time if you’re looking to purchase your first home or an investment property!

A couple of weeks ago I mentioned the FHA minimum down payment would be changed to 3.5% effective October 1, 2008.  The Department of Housing and Urban Development (HUD) has postponed the change to FHA minimum down payment until January 1, 2009.  So for now, the down payment remains at 3%.

As the banking system has undergone some obvious changes in 2008, FHA has become one of the most chosen products for clients looking for a low down payment.  The VA home loan and USDA rural housing are the two programs still offering 100% financing.