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April 2011
Lynn is standing knee deep in water as the river rose in April in Louisville Ky. The Lynn Thomas Real Estate Team then quickly sent the Great Scott out on a errand to scout out the neighborhood of the month. Lo and behold he found Homes for Sale in The Polo Fields. The Polo Fields is a neighborhood in the east end of Louisville. Driving down Shelbyville road out past the Gene Snyder freeway it quickly feels like your driving into the country. Make a left onto flat rock road and cruise down the winding country road and you'll see it on the left. A life size statue of the Polo Man. He is riding his Polo Steed ready to strike his Polo ball.
Visit the link above to see the picture of the Striking Polo Man and take a tour of the Polo Fields with the Great Scott. See the flowers in bloom and you don't want to miss those beautiful Homes for Sale in the Polo Fields.
March 2011
Lynn and Kathryn are seeing a strong uptick in the amount of buyers entering the market place this month. Kathryn is seeing a new record amount of buyers looking for home, while Lynn is selling them quickly once they become listed. Lynn sold a home in the Highlands at 1520 Goddard Ave in 4 days! If you would like more information about Louisville Real Estate of, contact The Lynn Thomas Team.
Lynn is standing knee deep in water as the river rose in April in Louisville Ky. The Lynn Thomas Real Estate Team then quickly sent the Great Scott out on a errand to scout out the neighborhood of the month. Lo and behold he found Homes for Sale in The Polo Fields. The Polo Fields is a neighborhood in the east end of Louisville. Driving down Shelbyville road out past the Gene Snyder freeway it quickly feels like your driving into the country. Make a left onto flat rock road and cruise down the winding country road and you'll see it on the left. A life size statue of the Polo Man. He is riding his Polo Steed ready to strike his Polo ball.
Visit the link above to see the picture of the Striking Polo Man and take a tour of the Polo Fields with the Great Scott. See the flowers in bloom and you don't want to miss those beautiful Homes for Sale in the Polo Fields.
March 2011
Lynn and Kathryn are seeing a strong uptick in the amount of buyers entering the market place this month. Kathryn is seeing a new record amount of buyers looking for home, while Lynn is selling them quickly once they become listed. Lynn sold a home in the Highlands at 1520 Goddard Ave in 4 days! If you would like more information about Louisville Real Estate of, contact The Lynn Thomas Team.
February 20 2011
Perry and Lynn Travel to Anaheim
January 18 2011
Perry and Lynn are heading out to Keller Williams Family Reunion. The full schedule is available on Lynn's website. The actual event is there with all the details.
October 14 2010
Change on the horizon? From a national perspective, September shows an increase in buying activity. The pending home sales index rose 5.2% nationally. According to the National Association of Realtors, the index rose 6.3% in the northeast and in the Midwest it rose 4.1%. In the south it rose 1.2% and in the west it rose 11.6%. A rise in the index could represent a rise in home prices as it represents an increase in consumer demand. What's interesting is that although some areas have increased sales, they still have inventories, (homes for sale) that represent good value from a purchase perspective. Home prices are still at historic lows and interest rates are at an amazing 4.37%. The point here is, even though people are buying homes at an increased rate in September, there are lots of opportunity to buy a home at a terrific value.
September 15 2010
Perry and Lynn Thomas Went to Mega Camp in Austin Tx. in September 2010. While they were there they went to visit some dear friends who relocated from Louisville Kentucky to Katy Texas. Perry and Lynn Learned about how to be more effective selling their listings online using social media. They networked with other mega agents around the country to better serve their clients who are relocating to and from Louisville to other parts of the country and the rest of the globe. Perry is a huge fan of Stephan Swanepoel. Stephan is an analyst of the Real Estate Industry. Perry got to meet him him briefly and can't stop talking about it.
May 27th 2010
The Lynn Thomas Real Estate Team discovered a pause in home price declines. This year, nationally according to the National Association of realtors, or the NAR, home prices are 12% less this year than they were last year. However, they went up 4% since last month. 53% of the homes purchased were by first time homebuyers. The first time homebuyer typically represents 40% of home sales. The 13% difference can be attributed to first time home buyers federal tax credit. We can presume the 4% increase in home sales is a result of that increased demand brought on by the federal tax credit. The first time home buyers tax credit is now no longer in effect.
March 24th 2010
What is happening with Real Estate Franchises
Back in February, Perry Thomas went to a Keller Williams conference in New Orleans called Family Reunion. He attended a session taught by Stefan Swanepoel. For more information on Stefan simply visit http://www.swanepoel.com/. Stefan is a speaker that analyses trends in the Real Estate Market.
During a portion of his presentation, was a segment he defined the last few decades and who owned each decade in terms of market share.
1970/1980 was owned by Century 21. The gold jackets ruled as Century 21 became the first company to francise and go national. Until that time, real estate was localized being ruled by local real estate brokers.
1980/1990 was owned by Remax. The idea of an independant francise where the agent paid less commission split to the broker and a higher monthly fee in the form of desk fees and office fees took off.
1990/2000 was owned by realogy who gobbled up local companys at a ferocious pace. Coldwell Bankers Century 21, ERA, Sothby's and others combined to crush their competion. Unfortunately, this goliath did not have an adequate business model to face a shifting market. Toward the end of the decade, Realogy faced stagering debt and a huge loss of market share.
2000/2010 With zero debt, the Keller Williams business model proved itself superior to the rest. Keller Williams Realty is the only national francise who went up in agent count and sales olume in the year 2009. So, while the other top real estate francises decreased in value, Keller Williams increased so much, at its current trajectory, it should claim the number 1 position by the end of 2010.
June 09, 2009
Mortgage News Update
Fannie Mae changed the rules for condo purchases. 70% of new projects (new construction) must be sold in order to qualify the unit as a Fannie Mae project. 51% of units had to be sold under contract in the past. Fannie Mae has tightened the guidelines due to the prevention of further loss of revenue from these projects. If 70% if the new projects are not sold, financing has to come from other sources.
Warehouse lending has become more difficult. In 2003, at the height of the mortgage industry, more than 50% of the Mortgage business was originated by Mortgage Brokers. Now, only about 16% of the business comes from Mortgage Brokers. A huge amount of Mortgage Brokers just got out of the business. It has become more difficult for them to be in business largely due to government regulations.
Those Mortgage Brokers that are still in business are more qualified and have to work that much harder to stay qualified. Also, it is a challenge to stay tuned with the constant changing of teh rules. Mortgage Banking is another option for originating the loan. In those cases, the loans come from the bank. So, the client buying the home still has choices. It is just the view on the inside of the industry that looks very different.
The good news is : home buying affordability is way up! When one considers the price of homes being very low, interest rates historically low, and the $8,000 first time home buyers tax credit make it an incredible time to buy a home. What an incredible opportunity!
In terms of what is going on in the Mortgage Industry, the pendulum has definitely shifted from the philosophy of "everyone should be getting a loan", to "people must be qualified to buy a house".
May 26, 2009
The Median Home Price in Louisville
The median home price for April 2009 was $124,000. "The median" is a term describing the half way price point. So, half of the homes sold in April were below $124,000 and half sold were above that amount. It is actually a pretty good measurement to determine how overall home prices are doing relative to another time in history.
For example, the median home price fell 6% from a year ago. That means home values generally dropped. Although, this seems like tough news, The National Association of Realtors said that it fell 13.8% nationally.
It is also interesting that the amount of homes sold in April was also down 22%. What that means to those of us selling our homes, is that we have to become even more aggressive on our price if we want our house to sell.
May 1, 2009
The Incredible Tax Benefits of Home Ownership
A stunning revelation of the advantages of home ownership was published by Robert D. Dietz, Ph.D. in an article he published March 27th entitled The Tax Benefits of Home Ownership.
Dr. Dietz ran the numbers and discovered that, "a household with $80,000 in annual income who obtains a $200,000 mortgage will save on average $1,765 in the first year of home ownership. by the end of the fifth year of homeownership, the household will save on average $8,607 on taxes, and this amount grows to $19,488 by the end of the average period of ownership - twelve years. This stylized homeowner can expect to save $21,650 in capital gains in taxation, yielding a total benefit of $41,138 over the expected period of homeownership."
He also, "provides variants of these calculations if the analysis allows the homeowner's income to increase with their age and labor market experience. For example, the five-year tax savings for this homeowner increases to $9,723."
His findings go on to calculate, "how the numbers are increased by the existence of the temporary $8,000 first-time homebuyer tax credit. In the case illustrated above, the five-year tax savings estimate increases 82% from $9,723 to $17,723."
The tax advantages for home owners are staggering. The deductibility of mortgage interest, deductibility of real estate taxes and capital gains exclusions for principle residences create unreal tax savings. Homes are and will continue to be a strong vehicle for helping us create wealth in our lives.
This paper has been made public as courtesy of
Perry and Lynn Travel to Anaheim
January 18 2011
Perry and Lynn are heading out to Keller Williams Family Reunion. The full schedule is available on Lynn's website. The actual event is there with all the details.
October 14 2010
Change on the horizon? From a national perspective, September shows an increase in buying activity. The pending home sales index rose 5.2% nationally. According to the National Association of Realtors, the index rose 6.3% in the northeast and in the Midwest it rose 4.1%. In the south it rose 1.2% and in the west it rose 11.6%. A rise in the index could represent a rise in home prices as it represents an increase in consumer demand. What's interesting is that although some areas have increased sales, they still have inventories, (homes for sale) that represent good value from a purchase perspective. Home prices are still at historic lows and interest rates are at an amazing 4.37%. The point here is, even though people are buying homes at an increased rate in September, there are lots of opportunity to buy a home at a terrific value.
September 15 2010
Perry and Lynn Thomas Went to Mega Camp in Austin Tx. in September 2010. While they were there they went to visit some dear friends who relocated from Louisville Kentucky to Katy Texas. Perry and Lynn Learned about how to be more effective selling their listings online using social media. They networked with other mega agents around the country to better serve their clients who are relocating to and from Louisville to other parts of the country and the rest of the globe. Perry is a huge fan of Stephan Swanepoel. Stephan is an analyst of the Real Estate Industry. Perry got to meet him him briefly and can't stop talking about it.
May 27th 2010
The Lynn Thomas Real Estate Team discovered a pause in home price declines. This year, nationally according to the National Association of realtors, or the NAR, home prices are 12% less this year than they were last year. However, they went up 4% since last month. 53% of the homes purchased were by first time homebuyers. The first time homebuyer typically represents 40% of home sales. The 13% difference can be attributed to first time home buyers federal tax credit. We can presume the 4% increase in home sales is a result of that increased demand brought on by the federal tax credit. The first time home buyers tax credit is now no longer in effect.
March 24th 2010
What is happening with Real Estate Franchises
Back in February, Perry Thomas went to a Keller Williams conference in New Orleans called Family Reunion. He attended a session taught by Stefan Swanepoel. For more information on Stefan simply visit http://www.swanepoel.com/. Stefan is a speaker that analyses trends in the Real Estate Market.
During a portion of his presentation, was a segment he defined the last few decades and who owned each decade in terms of market share.
1970/1980 was owned by Century 21. The gold jackets ruled as Century 21 became the first company to francise and go national. Until that time, real estate was localized being ruled by local real estate brokers.
1980/1990 was owned by Remax. The idea of an independant francise where the agent paid less commission split to the broker and a higher monthly fee in the form of desk fees and office fees took off.
1990/2000 was owned by realogy who gobbled up local companys at a ferocious pace. Coldwell Bankers Century 21, ERA, Sothby's and others combined to crush their competion. Unfortunately, this goliath did not have an adequate business model to face a shifting market. Toward the end of the decade, Realogy faced stagering debt and a huge loss of market share.
2000/2010 With zero debt, the Keller Williams business model proved itself superior to the rest. Keller Williams Realty is the only national francise who went up in agent count and sales olume in the year 2009. So, while the other top real estate francises decreased in value, Keller Williams increased so much, at its current trajectory, it should claim the number 1 position by the end of 2010.
June 09, 2009
Mortgage News Update
Fannie Mae changed the rules for condo purchases. 70% of new projects (new construction) must be sold in order to qualify the unit as a Fannie Mae project. 51% of units had to be sold under contract in the past. Fannie Mae has tightened the guidelines due to the prevention of further loss of revenue from these projects. If 70% if the new projects are not sold, financing has to come from other sources.
Warehouse lending has become more difficult. In 2003, at the height of the mortgage industry, more than 50% of the Mortgage business was originated by Mortgage Brokers. Now, only about 16% of the business comes from Mortgage Brokers. A huge amount of Mortgage Brokers just got out of the business. It has become more difficult for them to be in business largely due to government regulations.
Those Mortgage Brokers that are still in business are more qualified and have to work that much harder to stay qualified. Also, it is a challenge to stay tuned with the constant changing of teh rules. Mortgage Banking is another option for originating the loan. In those cases, the loans come from the bank. So, the client buying the home still has choices. It is just the view on the inside of the industry that looks very different.
The good news is : home buying affordability is way up! When one considers the price of homes being very low, interest rates historically low, and the $8,000 first time home buyers tax credit make it an incredible time to buy a home. What an incredible opportunity!
In terms of what is going on in the Mortgage Industry, the pendulum has definitely shifted from the philosophy of "everyone should be getting a loan", to "people must be qualified to buy a house".
May 26, 2009
The Median Home Price in Louisville
The median home price for April 2009 was $124,000. "The median" is a term describing the half way price point. So, half of the homes sold in April were below $124,000 and half sold were above that amount. It is actually a pretty good measurement to determine how overall home prices are doing relative to another time in history.
For example, the median home price fell 6% from a year ago. That means home values generally dropped. Although, this seems like tough news, The National Association of Realtors said that it fell 13.8% nationally.
It is also interesting that the amount of homes sold in April was also down 22%. What that means to those of us selling our homes, is that we have to become even more aggressive on our price if we want our house to sell.
May 1, 2009
The Incredible Tax Benefits of Home Ownership
A stunning revelation of the advantages of home ownership was published by Robert D. Dietz, Ph.D. in an article he published March 27th entitled The Tax Benefits of Home Ownership.
Dr. Dietz ran the numbers and discovered that, "a household with $80,000 in annual income who obtains a $200,000 mortgage will save on average $1,765 in the first year of home ownership. by the end of the fifth year of homeownership, the household will save on average $8,607 on taxes, and this amount grows to $19,488 by the end of the average period of ownership - twelve years. This stylized homeowner can expect to save $21,650 in capital gains in taxation, yielding a total benefit of $41,138 over the expected period of homeownership."
He also, "provides variants of these calculations if the analysis allows the homeowner's income to increase with their age and labor market experience. For example, the five-year tax savings for this homeowner increases to $9,723."
His findings go on to calculate, "how the numbers are increased by the existence of the temporary $8,000 first-time homebuyer tax credit. In the case illustrated above, the five-year tax savings estimate increases 82% from $9,723 to $17,723."
The tax advantages for home owners are staggering. The deductibility of mortgage interest, deductibility of real estate taxes and capital gains exclusions for principle residences create unreal tax savings. Homes are and will continue to be a strong vehicle for helping us create wealth in our lives.
This paper has been made public as courtesy of
1. Semonin Realtors
2. Remax Properties East
3. Century 21 Realty Group Cos.
4. Re/Max Associates
5. Coldwell Banker McMahan Co.
6. Schuler Bauer Real Estate Services
7. Re/Max 100 Inc.
8. Re/Max Alliance
9. ERA Kepple Keene Realtors
10. Keller Williams Realty Louisville East
2. Remax Properties East
3. Century 21 Realty Group Cos.
4. Re/Max Associates
5. Coldwell Banker McMahan Co.
6. Schuler Bauer Real Estate Services
7. Re/Max 100 Inc.
8. Re/Max Alliance
9. ERA Kepple Keene Realtors
10. Keller Williams Realty Louisville East
It is absolutely amazing to consider a real estate office opening in an extremely competitive marketplace and within one year taking the number ten spot in that marketplace. Especially, since it didn't open until March of 2008.
The phenomenal growth is due in large part to the culture of the office. The marketcenter is agent centric. One of the primary focuses is on educating and equipping the individual agents to exceed to the highest levels in their businesses. Uniquely, the agents train each other. It's not a staff person assigned to training agents. A spirit of collaboration is formed when agents share what they know and grow stronger as a result.
It's reflected in an abundance philosophy that is shared among the agents. The feeling is there is enough real estate business for everyone even during times of scarcity. That atmosphere creates an energy that helps the agents succeed even more. It becomes infectious and causes the office to grow in both the amount of agents in the office and their individual production.
April 14, 2009
Perry and Lynn arrived in Panama City, Florida on Friday March 27th. They were there to set up for the arrival of 340 High School Students to Bible and Beach 2009. The students came from Southeast Christian Church in Louisville, Kentucky.
Once the students arrived, the stage was set for some amazing biblical teaching from Mark Moore of Ozark Christian College. matt Bayless from Northside Christian Church led some incredible times of worship. During the week, everyone studied the book of Exodus.
Fun was a major component of the week. The students participated in volleyball tournaments, flag football games, sandcastle building, square dancing and a talent show. Pictures of the event can be found onlinewww.bibleandbeach.com.
It truly was an amazing time to see what God was doing with his High School Students. A dozen students were baptized in the ocean, and two rededicated their lives to the Lord. Over forty students made a decision to make a 180 degree turn to get their lives back on track.
Nearly every student that went to Florida made a dramatic commitment to bring Glory to God. Perry and Lynn really are grateful for the opportunity to be apart of it as it happened. Given the opportunity, they would go to Bible and Beach all over again.
March 23, 2009
Keller Williams Louisville East Is The 10th Largest Real Estate Company In Louisville Kentucky
In the March issue of Business First Magazine, all of the real estate firms in Louisville were ranked according to how many sales each office made in 2008. Here is the ranking:
www.federalhousingtaxcredit.com
This is an amazing time for the first time homeowner to purchase their first home. The price of most real estate is at a record low. Most everything is on sale. Interest rates are also low. 5% to 6% make already low priced real estate even more affordable. Now Congress has offered us $8,000 cash back on our taxes if we buy our first home in 2009. As the first-time homebuyer considers their first purchase, now is an incredible time to buy that first home.
Keller Williams Louisville East Is The 10th Largest Real Estate Company In Louisville Kentucky
In the March issue of Business First Magazine, all of the real estate firms in Louisville were ranked according to how many sales each office made in 2008. Here is the ranking:
www.federalhousingtaxcredit.com
This is an amazing time for the first time homeowner to purchase their first home. The price of most real estate is at a record low. Most everything is on sale. Interest rates are also low. 5% to 6% make already low priced real estate even more affordable. Now Congress has offered us $8,000 cash back on our taxes if we buy our first home in 2009. As the first-time homebuyer considers their first purchase, now is an incredible time to buy that first home.
March 18, 2009
Home Sales In the United States Are Up This Year by 6.5%!!
There is a 6.5% national rise in homesales since November in 2008. This increase is driven largely by 4 states that experienced some of the biggest price declines in 2008. Home sales in California are up 84.7%, Nevada is up 133.7%, Arizona is up 42.6% and Florida is up 12.5%. The biggest reason for most of this new activity is because of distressed home sales, foreclosures and short sales.
It would appear that lower interest rates and lower home prices are attracting home buyers to markets like California, Florida, Arizona and Nevada. Could it be the states that brought us into the market downturn could be the ones who lead us out of it?
Comparing home prices in 2008 to 2007, according to the National Association of Realtors, California was down 26.9%, Nevada was down 22.8%, Arizona was down 19% and Florida was down 18.2%.
The states with the biggest price drops in 2008 are the same states that saw the biggest increases in home sales this year. With home sales on the rise 6.5% nationally, home prices low and mortgage rates at a low not seen since 1969, now is an incredible time to buy a home.
March 12, 2009
What The 2009 Tax Credit Is and How It Works
In February 2009, Congress expanded the first-time homebuyer tax credit (as modified in the American Recovery and Reinvestment Act) to provide a tax credit of up to $8,000 for first time home buyers that no longer has to be paid back to the government. It's called First Time Home Buyer Tax Credit and this is fundamentally what it is:
There is a 6.5% national rise in homesales since November in 2008. This increase is driven largely by 4 states that experienced some of the biggest price declines in 2008. Home sales in California are up 84.7%, Nevada is up 133.7%, Arizona is up 42.6% and Florida is up 12.5%. The biggest reason for most of this new activity is because of distressed home sales, foreclosures and short sales.
It would appear that lower interest rates and lower home prices are attracting home buyers to markets like California, Florida, Arizona and Nevada. Could it be the states that brought us into the market downturn could be the ones who lead us out of it?
Comparing home prices in 2008 to 2007, according to the National Association of Realtors, California was down 26.9%, Nevada was down 22.8%, Arizona was down 19% and Florida was down 18.2%.
The states with the biggest price drops in 2008 are the same states that saw the biggest increases in home sales this year. With home sales on the rise 6.5% nationally, home prices low and mortgage rates at a low not seen since 1969, now is an incredible time to buy a home.
March 12, 2009
What The 2009 Tax Credit Is and How It Works
In February 2009, Congress expanded the first-time homebuyer tax credit (as modified in the American Recovery and Reinvestment Act) to provide a tax credit of up to $8,000 for first time home buyers that no longer has to be paid back to the government. It's called First Time Home Buyer Tax Credit and this is fundamentally what it is:
- The Tax Credit is for first time home buyers only.
- The Credit does not have to be repaid if the buyer stays in the house more than 3 years.
- The Tax Credit is equal to 10% of the home's purchase price up to a maximum of $8,000.
- The Tax Credit is available for homes purchased on or after January 1, 2009 and before December 1, 2009.
- The Tax Credit is available for single taxpayers with incomes up to $75,000 and married couples with incomes up to $150,000.
That is essentially it. If you have any more questions about the plan, just visit the website where most of this information came from. It is www.HousingEconomics.com
March 5, 2009
Lynn and Perry went to Orlando last week and attended the annual Keller Williams Conference called Family Reunion.
Thousands of Keller Williams Agents from all over the Country and Canada filled up the Orange County Convention center in Orlando, Florida. Perry and Lynn met with old friends from all over the country and went to so many training classes. Perry said, "It's like trying to drink water from a fire hydrant; there is so much great information!"
Clint Swindall was the keynote speaker who explained when asking how someone is, rather than asking, "Hey how are you?" and getting an answer you way not want, try asking, "Tell me somethin' good!"
An incredible announcement was made during the state of the company event that Keller Williams bumped RE/MAX for the number 3 position in agent count in the United States. The current count is as follows: #1 Coldwell Banker 101,170 agents #2 Century 21 98,390 agents #3 Keller Williams 72,794 agents #4 RE/MAX 69,108 agents #5 Prudential 62,000 agents.
During a time when most real estate franchises are cutting back benefits for the agents, Keller Williams is adding more free training to everyone and unbelievably, affordable health care for their agents.
Perry and Lynn stayed two additional days in Orlando, Florida so Perry could swim in hte ocean at Coco Beach and go see Peter Pan and Tinkerbell at the Magic Kingdom.
On their drive home, Perry and Lynn were so inspired by the conference they couldn't wait to get home and omplement these phenomenal elements into their business. They feel challenged to give more time and energy to their staff and clients than they ever have before. The are off to not just survive, but to thrive in this current Louisville Real Estate Market.
Lynn and Perry went to Orlando last week and attended the annual Keller Williams Conference called Family Reunion.
Thousands of Keller Williams Agents from all over the Country and Canada filled up the Orange County Convention center in Orlando, Florida. Perry and Lynn met with old friends from all over the country and went to so many training classes. Perry said, "It's like trying to drink water from a fire hydrant; there is so much great information!"
Clint Swindall was the keynote speaker who explained when asking how someone is, rather than asking, "Hey how are you?" and getting an answer you way not want, try asking, "Tell me somethin' good!"
An incredible announcement was made during the state of the company event that Keller Williams bumped RE/MAX for the number 3 position in agent count in the United States. The current count is as follows: #1 Coldwell Banker 101,170 agents #2 Century 21 98,390 agents #3 Keller Williams 72,794 agents #4 RE/MAX 69,108 agents #5 Prudential 62,000 agents.
During a time when most real estate franchises are cutting back benefits for the agents, Keller Williams is adding more free training to everyone and unbelievably, affordable health care for their agents.
Perry and Lynn stayed two additional days in Orlando, Florida so Perry could swim in hte ocean at Coco Beach and go see Peter Pan and Tinkerbell at the Magic Kingdom.
On their drive home, Perry and Lynn were so inspired by the conference they couldn't wait to get home and omplement these phenomenal elements into their business. They feel challenged to give more time and energy to their staff and clients than they ever have before. The are off to not just survive, but to thrive in this current Louisville Real Estate Market.
February 13, 2008
Whats going on with the new Stimulus Package as it pertains to the Real Estate Market?
The senate is discussing a portion of the stimulus package called fix housing. There are two primary compents under discussion. The first on is the $15,000 Homebuyer tax credit.
Many of us know that current credit of $7,500 exists to those first time homeowners that purchase a house this year. The plan will expand that number to $15,000 and open it up to everyone not just to first time homeowners. Under debate is, will we have to pay it back? If so, how much? A tax credit is a powerful idea. That will certainly put money back in the hands of tax payers. For example, if you owe Uncle Sam $1,000, instead of writing a check for that amount, you will get a $14,000 check. That's dramatic. Not only will that put cash in peoples hands, it will cause more people to want to buy real estate. More buyers in the market place causes more demand. As demand increases, prices rise.
The other portion of fix housing talks about getting mortgage rates between 4.0 and 4.5%. It's complicated how they plan to achieve such a plan. One idea under discussion, is banks will issue these mortgages, then Fannie Mae and Freddie Mac will purchase these newly originated loans. That is not just new home purchases, but also refinancing of a current home. They are discussing an end date of these loans being the end of 2010.
They want to cap the program at $300 billion dollars. That seems to say, "If we hit $300 billion dollars in November of 09, that's it gang, no more loans." Estimates of the cost of the tax credit program comes in at about $20 billion. I don't hear language about a cap here, but the time period will be between January 1st (it will be retroactive for uswho already purchased) and December 2009. The minimum cost of both these programs will be $320 billion dollars. That comes to a little more that a third of the total stimulus package going toward fixing the housing problem.
