This is a great article, by Barry Habib, that I wanted to share with you that may help you to understand the current market situation and why we are there.
The ‘Mark to Market’ Accounting Rule:
What it is and why it is important to you now!
Barry Habib
Chairman of the Board, Mortgage Success Source
The financial crisis we are in today was not caused by mortgages or housing, although they were both catalysts. The real reason was an accounting rule called "Mark to Market" (also known as FASB 157).
Few people have a strong grasp of this rule, and even those who do have a tough time explaining it on air due to time restrictions. So let’s take a few minutes to break it down, so you can have the inside track on this very important concept and understand why it represents some great opportunities.
Why does ‘Mark to Market’ exist?
Let’s go back to the stock market crash, which occurred between 2000 and 2002. With the S&P down 49% and the NASDAQ down 71%, many people lost much of their life savings and they were very angry.
Companies like Enron and Arthur Andersen were able to find ways to make their books looks more attractive, which was reflected in an artificially inflated stock price.
Both the public and Congress had a call for more transparency in business and hastened the passage of “Mark to Market” accounting.
This is the notion that all assets should be valued as if they were sold on a daily basis. Under the letter of the law, failure to do this conservatively can now result in jail time.
So what’s the problem?
Before we get into what this means for banks, let me make a quick analogy using a scenario that should make perfect sense to you and your clients.
Let’s imagine that you own a house in a neighborhood where all of the houses are priced at around $300,000. Unfortunately, your neighbor, who owns his home free and clear, falls ill and needs emergency cash quickly. Because he is under duress, he must sell the home for $200,000 in order to get the cash he needs right away, even though the home is worth considerably more.
Now would this mean that your home is now worth the same $200,000 that your neighbor sold his for? Of course not, because you are not forced to sell under duress. It just means that your new neighbor got a great deal.
However, if you were a publicly traded company and had to abide by Mark to Market account rules, you and the rest of your neighbors would now have to say, by law, that your home was worth only $200,000 – not the $300,000 you would get for it if you actually sold. So what's the big deal? Read on.
So how does this principle apply to banks?
Let's say we decide to start a bank . . . call it XYZ Bank. We raise $2 Million to open our doors. Remember that our capital account is $2 Million. Banks make money by taking in deposits and paying low rates of interest to those depositors (maybe throw in a toaster too). We then take that money and make loans with it at higher rates. We keep the difference.
So, we turn that money into $30 Million worth of loans. This puts our ratio of loans to capital (our Capital Ratio) at 15:1 ($15 Million in Loans to $1 Million in Capital). This level is acceptable, as long as we can shoulder some losses and recover.
Because we are very conservative here at XYZ Bank, the loans we make require a minimum down payment of 30%, a credit score of 800 or better (that’s nearly an 850 which is perfect), proof of income and assets, a reserve of at least two years of mortgage payments (normal is two months) and income requirements that only allow 10% of monthly income to cover all expenses (normal is 40%).
We do this and our loans perform perfectly. We make lots of money. Nobody is paying late and our clients are sending us holiday cards. They love us . . . it's a party. You and I are celebrating as we see our stock price soar.
But real estate values decline and, even though all of our loans are paying perfectly, we must re-assess the loan portfolio to account for the decline in real estate values, which leaves us with less of an equity cushion. We had a minimum 30% down payment, which means the loans were 70% of the value of our assets – until we account for the decline in the market. Now, our position goes from 70% to 90%. That's riskier and, therefore, worth less than when our loans had a 70% safety position.
Our accountants tell us that we must “Mark to Market” or risk jail. They say our value is now reduced by $1 Million. Whoa!
We must take (or write down) this loss against our capital account. It is a paper loss - we don't write a check, we have no late payers, no defaults, no bad business decisions. Still, we must reflect this $1 Million paper loss in our Capital Account, which drops from a $2 Million to $1 Million in value.
Here’s where things get problematic.
At this level, with $30 Million in loans outstanding, we now have a capital ratio of 30:1. At this level of leverage, alarms begin to sound.
Our ratios are out of the safe zone; we could go under with just a few losses, deposits are in jeopardy. Hello FDIC examiner, we are on the watch list, the Securities and Exchange Commission (SEC) is asking questions and our stock starts to tumble. The business networks are showing coverage of our now troubled bank. We are in big trouble.
The problem, we are "over leveraged". The solution? We have to “de-lever” . . . and do so quickly. But there are only two ways to do that, and one of them isn’t really an option.
The first way is to raise capital, but that’s not going to happen when our ratios are out of whack and we are in serious trouble as well as on the FDIC watch list. It is unlikely that anyone will be willing to invest cash in XYZ Bank.
The other option is that we can sell assets, like the outstanding loans, which are increasing our capital ratio. Like your neighbor, who owned his home outright but needed cash for medical bills, we are now under duress. The paper we are holding has a lot of value, but we have to sell it quickly and, because of that, cheaply. So, we offload the loans at a loss, which exacerbates the problem because those losses further reduce our capital account.
Very quickly, like a flushing toilet, things start to spiral – we are going down.
The problem multiplies
The problem doesn’t stop there. The fire sale we just had on our loans makes things worse – even for the banks that bought them up and thought they were getting a great deal.
Under Mark to Market, the loans we just sold must be included in the comparables that other financial institutions use to value their assets. This is how the problem spread and got so bad so fast. Other good institutions, with good loans, have to mark down. Just like us, they become over-leveraged. It’s a chain reaction, all triggered by a well intentioned, but over-reaching accounting rule.
Financial institutions fold, sell, or freeze. Credit - the life blood of our economy - is cut off at the source. Because of a lack of available credit, home sales and refinances crawl, auto sales drop and jobs are lost. Additionally, the economy enters a recession.
During the last recession in 2001, the economy recovered relatively quickly thanks to $3 Trillion worth of home equity withdrawals. But, more restrictive programs, a lack of available credit, and lower home values will make it difficult for us to use home equity to help pull us out of a recession this time around.
Fixing the problem
The Federal Reserve has passed a rescue plan, which, over time, will provide some level of help. Some banks will get money to infuse into their capital accounts. Others can sell some assets to the government in an effort to “de-lever”.
But, the big thing that is not talked about, not well understood, is the part of the rescue plan that traces this financial crisis back to the source.
The US Congress has given the SEC its blessing to modify “Mark to Market” accounting. And by January 2, SEC Chairman, Chris Cox has to get back to Congress with ideas, if any, on how to fix Mark to Market accounting.
It won't be eliminated, as we will not want to go back to the Enron days. But he is likely to adjust the Mark to Market provisions.
Here’s one potential solution - even rental or commercial real estate properties can be valued two ways:
1. The comparable sales method, which determines the value based on what other assets have sold for, which is the way Mark to Market work currently.
2. A cash flow method, which values the property based upon cash coming in.
If we see Mark to Market modified to use cash flow to value assets, without requiring a large percentage discounting mechanism - wow! What a shot in the arm that would be. We’d likely see the stock market rally, with financial stocks leading the uphill charge.
Consider that, in today’s market, fund managers are holding 27% of their assets in cash, compared with just 3% they held in cash when the stock market peaked in October of 2007. That means there is a lot of money on the sidelines that can push stock prices higher. Additionally, think about the redemptions from hedge funds that eventually need to be put back to work. That’s another reason to be optimistic about stocks in the first quarter of 2009 – provided that Chairman
Cox modifies Mark to Market accounting in a meaningful way. And a good stock market helps individuals feel better about purchasing homes. Additionally, stronger balance sheets for financial institutions will allow them to lend more money.
The bottom line
With some potentially very good news around the corner, there might be reason for optimism as we head into 2009.
Wednesday, January 28, 2009
Saturday, January 24, 2009
December 2008 Tucson Market Report
"AFFORDABLE" IS RETURNING TO THE TUCSON HOUSING
MARKET....according to the Tucson Association of Realtors Multiple Listing
December 2008 Statistical Report. In comparing December 2008 stats with the
past data we find: * The Median Sales Price of $167,900 is the lowest Median
since August 2004; *The December Average Sales Price of $200,055
is the lowest Average since February 2004; *The December 31, 2008 Listing
Inventory Count of 7,627 was the lowest since March 2006; *The December 2008 New Listings entering the market were the least since February 2005.
Arizona's foreclosures slowed in November and December as we saw Fannie Mae and Freddie Mac suspend foreclosure proceedings and evictions from single family homes. This suspension has been extended through the end of January to allow homeowners facing foreclosure to stay in their homes as they work with mortgage servicers under the Streamlined Modification Program. I have been assisting Fannie Mae also in developing a Short Sale "preapproval" program focused on those listings that may qualify for a short sale. This program is initially being tested in Phoenix and Orlando, where the foreclosure threat is much worse than Tucson. Many are predicting that Tucson's real estate market will show improvement in 2009!!
Home Sales Volume: Declined 19.93% from $193,643,336 in Dec. '07 to $155,042,902 in Dec. '08
Home Sales Units: Increased 2.92% from 753 in Dec. '07 to 775 in Dec. '08.
Average Sales Price (all res. types):
Decreased 22.21% from $257,162 in Dec. '07 to $200,055 in Dec.. '08
Median Sales Price (price at which half the homes were sold above and half below):
Decreased 20.05% from $210,000 in Dec. '07 to $167,900 in Dec. '08
Pending Contracts (New Sales Opening Escrow in Month):
Decreased 23.40% from 799 Units in Dec. '07 to 612 Units in Dec. '08
Active Listing Inventory:
Declined 12.41% from 8,708 in Dec. '07 to7,627 in Dec. '08
New Listings: Declined 5.6% from 1,590 in Dec. '07 to 1,501 in Dec. '08
MARKET....according to the Tucson Association of Realtors Multiple Listing
December 2008 Statistical Report. In comparing December 2008 stats with the
past data we find: * The Median Sales Price of $167,900 is the lowest Median
since August 2004; *The December Average Sales Price of $200,055
is the lowest Average since February 2004; *The December 31, 2008 Listing
Inventory Count of 7,627 was the lowest since March 2006; *The December 2008 New Listings entering the market were the least since February 2005.
Arizona's foreclosures slowed in November and December as we saw Fannie Mae and Freddie Mac suspend foreclosure proceedings and evictions from single family homes. This suspension has been extended through the end of January to allow homeowners facing foreclosure to stay in their homes as they work with mortgage servicers under the Streamlined Modification Program. I have been assisting Fannie Mae also in developing a Short Sale "preapproval" program focused on those listings that may qualify for a short sale. This program is initially being tested in Phoenix and Orlando, where the foreclosure threat is much worse than Tucson. Many are predicting that Tucson's real estate market will show improvement in 2009!!
Home Sales Volume: Declined 19.93% from $193,643,336 in Dec. '07 to $155,042,902 in Dec. '08
Home Sales Units: Increased 2.92% from 753 in Dec. '07 to 775 in Dec. '08.
Average Sales Price (all res. types):
Decreased 22.21% from $257,162 in Dec. '07 to $200,055 in Dec.. '08
Median Sales Price (price at which half the homes were sold above and half below):
Decreased 20.05% from $210,000 in Dec. '07 to $167,900 in Dec. '08
Pending Contracts (New Sales Opening Escrow in Month):
Decreased 23.40% from 799 Units in Dec. '07 to 612 Units in Dec. '08
Active Listing Inventory:
Declined 12.41% from 8,708 in Dec. '07 to7,627 in Dec. '08
New Listings: Declined 5.6% from 1,590 in Dec. '07 to 1,501 in Dec. '08
Home Buyer Tax Credit
Home Buyer Tax Credit: How It Works?
By Dale Martin
CAMDEN AND ROCKLAND (Dec 29): First-time homebuyers in 2008 can take an income-tax credit on their purchase, thanks to passage in Congress earlier this year of the first-time home buyer tax credit.
The definition of first-time homebuyer is generous. To get the credit, the homebuyer cannot have owned a home in the previous three years. The home must be a principal residence and purchased between April 9, 2008 and July 1, 2009.
The credit is equal to 10 percent of the purchase price, up to $7,500. Single taxpayers with modified adjusted gross income up to $75,000 and couples with MAGI up to $150,000 will qualify for full credit. Singles with MAGI up to $95,000 and couples with MAGI up to $170,000 will get a reduced amount. Those with higher incomes don’t qualify.
If the amount of tax a homebuyer owes is less than the amount of the credit, they get to keep the difference in the form of an IRS refund.
The homebuyer must begin to repay the credit in two years in increments of about $500 a year over a 15-year period for those who received the full credit
Homebuyers who sell their home before the credit is repaid must pay off the loan with any profits. If they sell the home at a loss, the loan is forgiven.
[Editor's Note: The credit is set to expire in mid-2009, although industry groups, including the NATIONAL ASSOCIATION OF REALTORS®, are encouraging Congress to extend it. NAR is also encouraging Congress to make the credit available to all buyers and to eliminate the repayment requirement. More detail on how the credit works is available from NAR on REALTOR.org.]
Source: Chicago Tribune, Mary Umberger (12/28/2008)
By Dale Martin
CAMDEN AND ROCKLAND (Dec 29): First-time homebuyers in 2008 can take an income-tax credit on their purchase, thanks to passage in Congress earlier this year of the first-time home buyer tax credit.
The definition of first-time homebuyer is generous. To get the credit, the homebuyer cannot have owned a home in the previous three years. The home must be a principal residence and purchased between April 9, 2008 and July 1, 2009.
The credit is equal to 10 percent of the purchase price, up to $7,500. Single taxpayers with modified adjusted gross income up to $75,000 and couples with MAGI up to $150,000 will qualify for full credit. Singles with MAGI up to $95,000 and couples with MAGI up to $170,000 will get a reduced amount. Those with higher incomes don’t qualify.
If the amount of tax a homebuyer owes is less than the amount of the credit, they get to keep the difference in the form of an IRS refund.
The homebuyer must begin to repay the credit in two years in increments of about $500 a year over a 15-year period for those who received the full credit
Homebuyers who sell their home before the credit is repaid must pay off the loan with any profits. If they sell the home at a loss, the loan is forgiven.
[Editor's Note: The credit is set to expire in mid-2009, although industry groups, including the NATIONAL ASSOCIATION OF REALTORS®, are encouraging Congress to extend it. NAR is also encouraging Congress to make the credit available to all buyers and to eliminate the repayment requirement. More detail on how the credit works is available from NAR on REALTOR.org.]
Source: Chicago Tribune, Mary Umberger (12/28/2008)
Saturday, December 13, 2008
November 2008 Market Report
TUCSON HOUSING MARKET, according to the Tucson Association of
Realtors Multiple Listing Service Statistical Report for November 2008.
The Active Listing invetory of 7,996 units remains much lower than the
9,234 units in Nov. 2007 and the New Listings coming on the market
continues the downward trend.
November's Median Sales Price of $178,000 is the lowest Median for any month since January
2005, when it was $177,000. Of course, this is good news for homebuyers and for the affordability issues which have plagued Tucson in the past. As of the end of November there were 4,429 residential homes on the market below $250,000. In quoting a local lender, "A buyer, buying a $200,000 home, with 3.5% down payment, using a 30 year, 6% fixed rate FHA loan could have a principal & interest payment of $1157". A first time homebuyer, or someone who hasn't owned in 3 years could also qualify for the $7500 Federal Tax Credit. "More Buyers are the answer for improving our Tucson real estate market".
Home Sales Volume: Declined 36.56% from $216,102,902 in Nov. '07 to $137,104,43 in Nov. '08
Home Sales Units Closed: Decreased 21.60% from 810 in Nov. '07 to 635 in Nov. '08
Average Sales Price (all res. types): Decreased 19.07% from $266,794 in Nov, '07 to
$215,913 in Nov. '08
Median Sales Price (price at which half the homes were sold above and half below):
Decreased 16.04% from $212,000 in Nov. '07 to $178,000 in Nov. '08
Average Days on Market for Month: Days on Market for Nov. '08 were 76 days
Pending Contracts (New Sales Opening Escrow in Month): Decreased 25.60% from
910 Units in Nov. '07 to 677 Units in Nov. '08
Active Listing Inventory: Declined 13.41% from 9,234 in Nov. '07 to
7,996 in Nov. '08
New Listings: Declined 27.38% from 2,224 in Nov. '07 to 1,615 in Nov. '08
Realtors Multiple Listing Service Statistical Report for November 2008.
The Active Listing invetory of 7,996 units remains much lower than the
9,234 units in Nov. 2007 and the New Listings coming on the market
continues the downward trend.
November's Median Sales Price of $178,000 is the lowest Median for any month since January
2005, when it was $177,000. Of course, this is good news for homebuyers and for the affordability issues which have plagued Tucson in the past. As of the end of November there were 4,429 residential homes on the market below $250,000. In quoting a local lender, "A buyer, buying a $200,000 home, with 3.5% down payment, using a 30 year, 6% fixed rate FHA loan could have a principal & interest payment of $1157". A first time homebuyer, or someone who hasn't owned in 3 years could also qualify for the $7500 Federal Tax Credit. "More Buyers are the answer for improving our Tucson real estate market".
Home Sales Volume: Declined 36.56% from $216,102,902 in Nov. '07 to $137,104,43 in Nov. '08
Home Sales Units Closed: Decreased 21.60% from 810 in Nov. '07 to 635 in Nov. '08
Average Sales Price (all res. types): Decreased 19.07% from $266,794 in Nov, '07 to
$215,913 in Nov. '08
Median Sales Price (price at which half the homes were sold above and half below):
Decreased 16.04% from $212,000 in Nov. '07 to $178,000 in Nov. '08
Average Days on Market for Month: Days on Market for Nov. '08 were 76 days
Pending Contracts (New Sales Opening Escrow in Month): Decreased 25.60% from
910 Units in Nov. '07 to 677 Units in Nov. '08
Active Listing Inventory: Declined 13.41% from 9,234 in Nov. '07 to
7,996 in Nov. '08
New Listings: Declined 27.38% from 2,224 in Nov. '07 to 1,615 in Nov. '08
Thursday, November 20, 2008
October 2008 Housing Report
THE TUCSON REAL ESTATE MARKET OFFERS MORE AFFORDABLE
HOMES..... as the Tucson Association of Realtors Multiple Listing Service
Statistical Digest shows the October 2008 Median Sales Price at $180,500 and
the Average Sales Price at $226,435. This decline could indicate an increase in
the number of "short sales" and foreclosed properties finally closing after a
lengthy escrow period. The increase in buyer traffic experienced in the past
few months subsided somewhat in October with the concerns around the
economy and equity markets. It is gernerally believed that the buyer traffic
will return soon, as buyers realize the improvement in home affordability in
the marketplace, coupled with low interest rates and a sense that pricing has
bottomed out.
Homes Sales Volume:
Declined 18,78% from $229,448,467 in October 2007 to $186,356,108 in October 2008.
Homes Sales Units:
Decreased 6.9% from 884 in October 2007 to 823 in October 2008.
Average Sales Price: (residential)
Decreased 12.76% from $259,557 in October 2007 to $22;6,435 in October 2008.
Median Sales Price:
Decreased 14.29% from $210,000 in October 2007 to $$180,500 in October 2008.
Average Days on Market:
Days on Market for October 2008 was 78 days.
Pending Sales:
Decreased 23.97% from 993 units in October 2007 to 755 units in October 2008.
There have been more stringent lending standards in most home loan programs, however, the
FHA Loan is readily available, and has become the "most applied for" mortgage, with a required 3% or less down payment, and somewhat less critical qualifying. Buyers with a strong Realtor, experienced in searching the MLS data, and familiar with the home loans offered by local lenders, will surely benefit.
For more on Tucson's Real Estate Market, contact Julie Nellis, Long Realty, 520-990-8477, nellisja@aol.com or http://www.tucsonhouses4you.com/
If you or someone you know is interested in buying or selling Tucson Real Estate, Call Julie today!
HOMES..... as the Tucson Association of Realtors Multiple Listing Service
Statistical Digest shows the October 2008 Median Sales Price at $180,500 and
the Average Sales Price at $226,435. This decline could indicate an increase in
the number of "short sales" and foreclosed properties finally closing after a
lengthy escrow period. The increase in buyer traffic experienced in the past
few months subsided somewhat in October with the concerns around the
economy and equity markets. It is gernerally believed that the buyer traffic
will return soon, as buyers realize the improvement in home affordability in
the marketplace, coupled with low interest rates and a sense that pricing has
bottomed out.
Homes Sales Volume:
Declined 18,78% from $229,448,467 in October 2007 to $186,356,108 in October 2008.
Homes Sales Units:
Decreased 6.9% from 884 in October 2007 to 823 in October 2008.
Average Sales Price: (residential)
Decreased 12.76% from $259,557 in October 2007 to $22;6,435 in October 2008.
Median Sales Price:
Decreased 14.29% from $210,000 in October 2007 to $$180,500 in October 2008.
Average Days on Market:
Days on Market for October 2008 was 78 days.
Pending Sales:
Decreased 23.97% from 993 units in October 2007 to 755 units in October 2008.
There have been more stringent lending standards in most home loan programs, however, the
FHA Loan is readily available, and has become the "most applied for" mortgage, with a required 3% or less down payment, and somewhat less critical qualifying. Buyers with a strong Realtor, experienced in searching the MLS data, and familiar with the home loans offered by local lenders, will surely benefit.
For more on Tucson's Real Estate Market, contact Julie Nellis, Long Realty, 520-990-8477, nellisja@aol.com or http://www.tucsonhouses4you.com/
If you or someone you know is interested in buying or selling Tucson Real Estate, Call Julie today!
Thursday, October 16, 2008
Tucson Water Changes
Graywater
On Tuesday, September 23, 2008 the Tucson City Council formally adopted the Graywater Ordinance mandating all new housing construction starting June 1, 2010 to be pre-plumbed with graywater systems. Graywater is to be used to irrigate landscaping and is wastewater that comes from bathroom sinks, laundry sinks, showers and tubs. Tucson Association of REALTORS® was an active stakeholder working on this ordinance. Although the house will come plumbed for graywater it will still be up to the home owner to connect plumbing to a system within the home.
Commercial Rainwater Harvesting
On Tuesday, October 14, 2008 the Tucson City Council formally adopted the Rainwater Harvesting Ordinance that has been developed over the past nine months. The TAR Public Affairs Committee approved the support of the ordinance that will require 50% of the annual irrigation needs of a commercial project be obtained by water harvesting means, which may include cisterns, burming, earthworks and other harvesting techniques. This is a much more palatable ordinance considering that initially the percentage was 100%.
Call Julie Nellis, Long Realty, for all your real estate needs. 520-918-3843, nellisja@aol.com
On Tuesday, September 23, 2008 the Tucson City Council formally adopted the Graywater Ordinance mandating all new housing construction starting June 1, 2010 to be pre-plumbed with graywater systems. Graywater is to be used to irrigate landscaping and is wastewater that comes from bathroom sinks, laundry sinks, showers and tubs. Tucson Association of REALTORS® was an active stakeholder working on this ordinance. Although the house will come plumbed for graywater it will still be up to the home owner to connect plumbing to a system within the home.
Commercial Rainwater Harvesting
On Tuesday, October 14, 2008 the Tucson City Council formally adopted the Rainwater Harvesting Ordinance that has been developed over the past nine months. The TAR Public Affairs Committee approved the support of the ordinance that will require 50% of the annual irrigation needs of a commercial project be obtained by water harvesting means, which may include cisterns, burming, earthworks and other harvesting techniques. This is a much more palatable ordinance considering that initially the percentage was 100%.
Call Julie Nellis, Long Realty, for all your real estate needs. 520-918-3843, nellisja@aol.com
September 2008 Tucson Housing Report
SEPTEMBER OF 2008 HAS SET A RECORD INCREASE IN SALES OVER AUGUST SINCE 1996!
Historically September is a slower month than August which has been the case since 1996. This year there was an increase in sales by 3.43% over August which affirms that the Tucson market is continuing to stabilize.
Now is a good time to buy a home.
- Conditions are ideal for buyers. Prices have moderated, and interest rates are hovering near 40-year lows.
- Current market conditions won't last long. NAR research shows that prices are beginning to stabilize and interest rates are creeping up. A modest increase in property values is expected in 2009.
- The new first-time homebuyer tax credit and the availability of a number of attractive and safe mortgage products provide additional reasons for buyers to get off the fence and into the market.
The market is strong and getting stronger.
- The new homebuyer tax credit contained in the new Housing and Economic Recovery Act of 2008 likely will bring about 2.5
million first-time buyers into the market between now and the middle of next year.
- The Emergency Economic Stability Act enacted on October 3, 2008 will help to improve credit markets, and NAR predicts that as a result home prices will pick up in 2009.
- Home ownership continues to be a wise investment. FHA market share is expected to triple over the next three years, from an estimated 4 percent in 2007 to 12 percent in 2009
Contact Julie Nellis for more information on Tucson's Real Estate Market. 520-918-3843 or visit my website at www.tucsonhouses4you.com
Historically September is a slower month than August which has been the case since 1996. This year there was an increase in sales by 3.43% over August which affirms that the Tucson market is continuing to stabilize.
Now is a good time to buy a home.
- Conditions are ideal for buyers. Prices have moderated, and interest rates are hovering near 40-year lows.
- Current market conditions won't last long. NAR research shows that prices are beginning to stabilize and interest rates are creeping up. A modest increase in property values is expected in 2009.
- The new first-time homebuyer tax credit and the availability of a number of attractive and safe mortgage products provide additional reasons for buyers to get off the fence and into the market.
The market is strong and getting stronger.
- The new homebuyer tax credit contained in the new Housing and Economic Recovery Act of 2008 likely will bring about 2.5
million first-time buyers into the market between now and the middle of next year.
- The Emergency Economic Stability Act enacted on October 3, 2008 will help to improve credit markets, and NAR predicts that as a result home prices will pick up in 2009.
- Home ownership continues to be a wise investment. FHA market share is expected to triple over the next three years, from an estimated 4 percent in 2007 to 12 percent in 2009
Contact Julie Nellis for more information on Tucson's Real Estate Market. 520-918-3843 or visit my website at www.tucsonhouses4you.com
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