H.R. 3221 is Signed into Law

On July 30, the President signed into law the "Housing and Economic Recovery Act of 2008". While there are a number of provisions aimed at reducing the risk of foreclosure for individuals and various reforms affecting the FHA program and Freddie Mac and Fannie Mae, there is one provision that may be significant to home buyers. "Qualified" home purchases during the period April 8,2008 and June 30, 2009 will allow the purchaser to claim a $7500 tax "credit" on their federal tax return. The "credit" is repayable over 15 years, in effect making it an interest free loan from the federal government.

Annual Real Estate Conference

Fraida and Tony just returned last week from the annual Star Power real estate conference in Orlando which was attended by 1200 of the top 1% of realtors in the U. S. and Canada. Attending this conference for each of the past 10 years has enabled them to stay at the cutting edge of the real estate industry as they compare notes with some of the top performing realtors in North America. Many markets around the U. S. are adjusting from the highs achieved during the 2002 - 2005 period. The markets that had the greatest price gains are now having the greatest price reductions as the supply of homes for sale are well in excess of the current demand for homes in most markets (although not all, Charlotte NC to name just one). Short sales are becoming common in some markets as sellers and lenders work together to get homes sold and closed. Seller's are generally faced with the the reality that today they are in both a "beauty contest" and a "price war", that is, they have to have the best looking house with the best price among the competition in their price range.

Market Update

July '08 showed 65 fewer homes sales closed than the previous July in Albany County (191 vs. 256) and down 7 from last month (191 in July '08 vs.198 in July '07. The average price increased from $251,000 in July '07 to $256,000 this past July but average days on the market increased from 52 last year to 60 this year. The sale to list price ratio was unchanged at 98%. At the beginning of this month of August there were 1363 single family homes on the market in Albany County. Pending contracts in last month (July) were 172 (vs. 225 last month) which indicates a 7.9 month supply of homes on the market. This is up from last month when there was a 5.9 month supply of homes. The market velocity (the rate at which homes are selling) has slowed some this month resulting in the 2 month increase in the supply of homes. A six month supply of homes is generally considered to be market that is in balance (neither a buyer's or seller's market). When the supply of homes exceeds six months for several months in a row then it is considered to be a buyer's market. Interest rates are still in the mid 6% range, which is still historically low although lenders underwriting criteria have generally tightened as a result of the sub-prime credit problem.