Chris Loveall & Ellie Melili

Time is running out for California residents wanting to take advantage of a $10,000 tax credit. The state set aside $100 million to help home buyers purchasing newly built homes, hoping to jump start the moribund residential-construction market. But only about 20% of the pot is left. "We're less than four months into it, and all the tax credits authorized are gone, or practically gone," said Tim Coyle, a senior VP with the California Building Industry Association (CBIA). The program launched in March and by June 3 nearly $24 million in tax credit certificates had already been issued, according to the state's Franchise Tax Board. That leaves nearly $76 million in credit available - but there are already numerous claims on that money. In fact, if all the submitted applications are approved, only $17.5 million will be left in the fund. And it has a run rate of about $10 million per week. "The program is working better than intended," said Coyle. "It's really pushing people off the fence." How it works 0:00 /2:47Mortgage rates tick back up The credit is available on a first-come first-served basis and was supposed to last through March 2010. Almost any newly built home qualifies, as long as it's an owner-occupied, principal residence on which property tax is paid. It could be a single-family home, a condo, a coop, a manufactured home or mobile home -- even a houseboat. Only owner-built housing does not qualify. There is no cap on the home price or buyer's income. The credit reduces taxes dollar-for-dollar up to $3,333 a year for three years, or 5% of the purchase price of a home, whatever is less. Unlike the federal first-time homebuyers tax credit, which is $8,000 or 10% of the home price, whichever is less, the California credit is not refundable. That means the credit will only wipe out taxes up to the full amount paid or owed but no more. For example, if the buyer's tax bill came to $2,000 for the year, a buyer claiming the full $3,333 would owe nothing but couldn't claim the extra $1,333 back from the state. First-time, new-home buyers in California can claim both the federal credit and the state if they qualify. That could reduce taxes by $11,333 for the first year of ownership. More money coming? Because the money has gone so quickly, the state legislature is considering adding another $200 million to the program. That may be difficult to accomplish right now, however: The state is worse than flat-broke; it's running a $24 billion budget deficit and has the lowest bond rating of any state. But Coyle argues that the credit is a net win for state coffers and it puts people to work. "Every time you build a home in California, you're generating $16,000 in taxes," he said. During the boom years, developers were building about 200,000 housing units annually and supported about a half million jobs. Now, only about 50,000 new homes will go up this year and industry employment has shrunk to a fraction of its peak. From 2006 to 2007 alone, industry employment dropped by about 220,000 jobs, according to the CBIA. Passage of an extension of the program has a good chance, according to Assemblywoman Anna Caballero (D-Salinas), who supports a new bill that already won Assembly approval and has gone to the state Senate. There has been little opposition, she said, but the program has to be "revenue neutral," which could limit how much is made available as funds would have to be cut from other areas to pay for it. There is also one big change from the original offering: People buying homes under construction - not just those already finished - will qualify, which should help put projects back on track. "It creates a reservation system that was absent in the first bill," said Caballero. "Buyers only received a credit when they closed escrow. Now, they would get it with a signed contract." "Contractors in Southern California were reporting no housing starts last January," she added. "Now, they have new crews out on the job. That's significant for California."

Updated April 2009

	House	Condo	Both
Homes for Sale	Apr '09	vs. Mar '09	Apr '09	vs. Mar '09	Apr '09	vs. Mar '09
# Homes for Sale	522	7%	101	1%	623	6%
For Sale by Owner	13	7.1%	0	-	13	7.1%
Bank & MLS Foreclosures	50	4.2%	9	40%	59	6.3%
Median List Price	$475K	3.3%	$299K	1.5%	$420K	1.2%
Median List $/SqFt.	$241	0%	$233	0%	$240	0.4%
Homes Sold	Feb '09	vs. Jan '09	Feb '09	vs. Jan '09	Feb '09	vs. Jan '09
# Homes Sold	82	19.6%	18	14.3%	100	18.7%
Median Sold Price	$350K	2.8%	$210K	4.3%	$342K	2.4%
Median Sold $/SqFt.	$224	5.1%	$218	15%	$224	2.6%
% Sale to List	99.2%	0.5%	100.7%	6.5%	99.4%	1.1%

Are we there yet? Anyone with a child who is old enough to speak has heard these words a thousand times - usually from the back seat of the car. And anyone who's heard that question asked over and over and over again knows how annoying it can get! But really, these kids are just tired of a ride that seems overwhelmingly long and unpleasant and they just want it to be over... So as it relates to the real estate market I totally identify with those kids right now, don't you?

Well, the long ride IS ending and there are good stats to support it. In zip codes across the US prices have hit bottom and in many cases are quickly increasing. These are primarily the regions that experienced the bubble pop early and have taken the biggest hits. They are the ones that we expect to recover first and signal that the bottom is here or at least near.

Some of the most brutally beaten down areas of Florida, Arizona, Nevada and California are seeing multiple offers, over the asking price coming in on properties. These "sun belt" cities are the ones we have been watching for indications of life so this is great news. Even better though is that it's not just the "sun belt" cities that are coming back. It's spreading!

According to First American CoreLogic of Santa Ana, CA, other cities across the nation are also seeing the stabilization of prices and increased sales. Included in the list (compiled for Businessweek.com) non "sun belt" cities include Howell, MI. (nearby Detroit), Woodbury, MN, Rio Rancho, NM, Humble, TX (nearby Houston), Duluth, GA, in the Atlanta metro area, and Des Plaines, Ill which is a suburb of Chicago.

The forecasted perfect storm for buyers is here and more and more previously sidelined buyers are stepping up to the plate. Foreclosure sales have driven down prices, mortgage rates are almost unbelievably low and lenders are lending. Inventories are beginning to shrink and prices are stabilizing. It feels like we're out of the fast-lane on the real estate bust highway and moving toward the off-ramp!

We don't expect that the bottom is going to look neat and pretty. It's likely to hit some bumps or stall out occasionally along the way, but it's going to happen and one day soon we'll all be able to say "yes... we are there."

JPMorgan Chase & Co. and Citigroup Inc. are halting home foreclosures while the Obama administration develops its plans to help the U.S. housing market. JPMorgan Chief Executive Jamie Dimon said the New York company plans to halt new foreclosures for owner-occupied home loans through March 6. Dimon made the pledge in a letter to Rep. Barney Frank, D-Mass., chairman of the House Financial Services Committee, who released it on Friday. Citigroup's foreclosure moratorium applies to all "Citi owned first mortgage loans that are the principal residence of the customer as well as all loans Citi services where we have reached an understanding with the investor" until President Barack Obama's administration has finalized the details of the loan modification program or March 12, whichever is earlier, according to a company release. New York-based Citi's action expands on a similar effort that it started in November. Frank earlier this week called on the mortgage industry to enact such broad foreclosure moratoriums. The administration is working on a plan to spend $50 billion on foreclosure prevention and establish national standards for modifying home loans. The White House said Friday Obama will outline on Wednesday his plan to help struggling homeowners. Press secretary Robert Gibbs said the president will detail his ideas in a speech in Arizona. Gibbs released no other details. "We stand ready to work with you to put the appropriate processes in place, including a national modification standard, to reduce the incidence of foreclosure and to encourage long-term, sustainable home mortgages," Dimon wrote. Government-controlled mortgage finance companies Fannie Mae and Freddie Mac suspended foreclosure sales during the winter holidays and have halted evictions from foreclosed properties until next month. And earlier this week, John Reich, director of the Office of Thrift Supervision, urged the more than 800 thrift institutions nationwide to do the same. Meanwhile, the administration is considering spending taxpayer dollars to cut monthly payments for homeowners on the verge of foreclosure. Still, deciding who would qualify would be a challenge, especially as foreclosures continue to soar. More than 274,000 U.S. households received at least one foreclosure-related notice last month, according to RealtyTrac Inc. The administration also is expected to back a push in Congress - but opposed by the mortgage industry - to let bankruptcy judges alter the terms of primary home loans. Earlier this week, Obama said it "makes no sense" that judges are not allowed to do so. The mortgage industry argues that this prohibition allows lenders to charge lower rates.