Doug Reynolds

Legislation aiming to extend California's maximum $10,000 new home buyer tax credit to several thousand more buyers has stalled, failing to pass during a frantic weekend rush to adjournment by the state Legislature.

The bill, AB 765, was among those pushed aside by bigger final-hour statewide issues, backers said Monday. "With the prison reform package still being negotiated and water discussions going on, things like that kind of got pushed to the back," said Willie Armstrong, chief aide to Assemblywoman Anna Caballero, D-Salinas.

The bill's status is unclear. Armstrong said it could receive a vote during upcoming special sessions being considered later this year. But that provides little certainty to first-time new-home buyers hoping to combine a state tax credit up to $10,000 with a federal $8,000 home buyer tax credit. The federal tax credit expires Nov. 30.

California's home-building industry had aimed to extend the credit to at least another 4,300 home buyers after the state's Franchise Tax Board estimated the average tax credit would be $7,000, not the full $10,000.

Breaking a period of stagnation, the median sales price moved slightly in August, increasing 5.6% over July's median sales price. Sales volume, however, decreased month-over-month.

Single family home sales topped out at 1,683 in August, an 8.9% decrease from the 1,848 sales of July. Year-to-year, the current figure is 10% below the 1,871 sales last August. REO sales decreased 11.8% month-to-month, from 908 in July to 801 this month. REO sales made up 47.6% of the total sales with short sales (18.8%) and conventional sales (33.6%) making up the remainder of sales. Compared with last month, REO sales have decreased slightly while short sales and conventional sales showed slight increases.

The median sales price increased, for the first time since April, to $190,000. This is a 5.6% change from the $180,000 median price of July. Compared year-to-year, the current figure is 12.8% below the $218,000 of August 2008. The Total Listing Inventory declined from 5,327 to 4,987, a 6.4% change. The current Total Listing Inventory is 31% below the 7,225 listing in August 2008. The Housing Market Supply figure increased slightly from 2.9 months in July to 3 months. Compared with last year, this figure is down 23% from the 3.9 months of inventory in August 2008. This figure represents the amount of time - in months - it would take to deplete the total listing inventory given the current rate of sales. According to MetroList® MLS Data, the average home spent 47 days on market (from the time it was listed to the time escrow was opened) and was 1,714 square feet. Of the 1,683 sales this month, 158 (9.4%) had 2 bedrooms or fewer, 880 (52.3%) had 3 bedrooms, 506 (30.1%) were 4 bedroom properties and 136 (8.3%) boasted 5+ bedrooms.

2009 SAR President Charlene Singley stresses to on-the-fence buyers the importance of acting now. "Houses are more affordable now than they have been in many years and interest rates are at historic lows." According to SAR records, the last time the Sacramento showed a similar median price was in April 2002 ($190,000), just before the median price skyrocketed. "First-time buyers should be aware that new regulations are resulting in longer escrows," continues Singley, "and the $8,000 credit is scheduled to expire November 30th. Now is really the time to get going for anyone planning to buy a home."

Doug's Take: Well the stats for the county are continuing on pretty much the same trend since February of this year. The median sales price, which bottomed out in February, continued to slightly rise. Sales, while slightly down from last month, were still very high. The inventory still remains very low at 3 months (a seller's market). And, multiple offers, over list price are still very common. It will be interesting to watch what happens with the market in the next six months. There are a lot of factors coming into play right now. The federal tax credit is set to expire on December 1. Some politicians are trying to extend and expand it but that is still very much in the air. The banks are "supposed" to be trickling a few more homes onto the market. The colder winter months are approaching. All of these things will have an effect on the market. I will of course keep you updated on the state of the market.

Lastly, before i go, i wanted to share a recent story as an example of the current market and a common occurrence. As a lot of new buyers are finding out, the competition for the lower priced homes is extremely high right now. Also, the banks are listing most of their foreclosure properties below market value to drive up the competition, get multiple offers and be able to choose the best buyer. I recently had a client looking in the Natomas area. The bank listed the property around 170k. We wrote our first offer at 200k. The listing agent received 30 offers on the house. The bank countered back asking for all of the buyers "highest and best" offers. Recent sales in the are of comparable homes supported a purchase price between 220 and 225k. We went to 220 and barely beat out the next highest offer. My clients had to go 50k over list price to get the home. That doesn't mean, all houses you have to go that high. That shows what the banks are doing right now by listing homes low to drive up the competition. The appraisal for my buyer came in actually above our agreed on price of 220k. Things are crazy out there right now but that's my job. To guide my clients through the mess and advice them on good decisions and represent them in achieving their goal of getting into the home they want. We will be closing escrow near the end of the month.

Call or email if there is any real estate needs you have.

clear skies,

doug

Oh, by the way, i'm never too busy for any of your referrals.

California bill would extend tax credit on new homes

By Jim Wasserman

Published: SacBee Wednesday, Sep. 9, 2009 - 12:00 am | Page 8B

A popular state tax credit of up to $10,000 that helped sell hundreds of new houses throughout the Sacramento region earlier this year appears to be coming back.

A plan to extend the state tax credit to another 4,285 buyers of new, unoccupied homes in California - possibly as many as 500 in the capital area - is expected to receive a vote in the Legislature by Friday's end of the session.

The buyer tax credit began March 1 and unexpectedly sold out by July 2 as many first-time California buyers combined the state credit with an $8,000 federal tax credit.

Statewide, Roseville ranked eighth among cities where new house buyers received the state credit. Sacramento ranked ninth, the state Franchise Tax Board reported.

"It was used very extensively," said Dennis Rogers, a government affairs executive with the Roseville-based North State Building Industry Association. He and others in Sacramento's struggling building industry said the credit helped prod buyers off the fence before it ended in July.

"We've definitely seen a lot of interest from homebuyers coming into the sales environment because of the program," said Pulte Homes spokeswoman Jacque Petroulakis. Pulte is the capital region's largest home builder.

The original tax credit also helped area builders clear an excess inventory of homes finished or nearly finished, but not yet sold.

Builders and buyers now in the sales process hope to see the bill pass the Legislature this week and be signed by Gov. Arnold Schwarzenegger.

That's considered likely by many close to the legislation. The governor was a force behind the original tax credit, calling it a job generator for the construction industry and larger California economy.

Statewide, 10,659 California buyers got the homebuyer credits, which allowed tax breaks of up to $3,333 per year for three years, the Franchise Tax Board reported Aug. 31. Buyers are expected to be notified by Friday about the amount of credit allocated or denied.

The tax agency stopped taking applications July 2, assuming that it had reached the program's $100 million limit. Original expectations were that most people could claim the entire $10,000. Then a newer FTB sample of taxpayers approved for the credit based on "their 2007 income tax liabilities, and incorporating 2009 tax law changes" showed most people won't owe enough state taxes to claim an entire $10,000 credit over three years.

"It's estimated that most people will get about $7,000," said FTB spokeswoman Brenda Voet. She said those who qualify for the entire $10,000 will still receive it.

The new FTB liability estimates means an estimated $30 million in credits could go unclaimed under provisions of the original tax credit bill passed in February.

Assembly Bill 765, by Assemblywoman Anna Caballero, D-Salinas, reauthorizes the tax credit under the new estimates. New credits would be available upon the bill's signing and run through March 1, 2010. Builders must apply on behalf of buyers within one week of closing escrow.

The new bill, however, won't help capital-area buyers who closed escrow after the FTB's July 2 deadline. They'll be ineligible for the tax break because they closed escrow during a time when the law, if it passes, was not in effect.

Doug's Take: This is good news for those who missed out on the credit the first time around. However, i do have an issue with the government not going back to those who purchased between the July 2nd cutoff and now. I think those buyers should have first dibs on the money. But hey, nothing fair right? Especially when it comes to the govt? Anyway, it sure sounds like the New Home Credit is going to be available again for a short while with the money that is left over. If you missed out but were interested the first time around, now would be a great time to act.

clear skies,

doug

"Oh, by the way, i'm never too busy for any of your referrals."

When i refer to the left hand side of you screen, i am talking about my personal website, www.BuyWithDoug.com .  Feel free to visit for additional information about buying, selling, my background and more.  Looking forward to talking with you and discussing your real estate needs.

clear skies,

doug