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Elaine Stewart, Palm Springs Real Estate

Congress Pleases Many By Extending And Expanding Homebuyers Tax Credit


There is no question the tax credit for new home buyers has contributed to the continuous rise in home sales. With the deadline approaching, many were rushing out to find the ideal home prior to the end of November. The good news is Congress has decided to extend the tax credit, while including many more this time around.HomeBuyer Tax Credit

Since January first-time homebuyers have been able to get a whopping $8,000 tax credit thanks to the economic stimulus package that was put in tact. While the plan was originally scheduled to expire at the end of November, the Senate decided it was the right move to extend and expand on the tax credit.

While first-time homebuyers and those who have not owned a home in the last three years can still get up to $8,000, the expansion also includes people who have owned their current home for at least five years. If you fall into this category, you can take advantage of a $6,500 tax credit. In order to qualify, whether a new homebuyer or not, you will need to sign a purchase agreement by April 30, 2010 and close by June 30.

Many assumed the tax credit would be extended, but it was getting closer and closer to the deadline worrying some. With this extension, Sen. Johnny Isakson believes this will be the last one to come. If this is the case, it gives you until April to find your new dream home.

The tax credit for homebuyers is one of two tax breaks now that totals out to $21 billion as the Senate has included it in a bill that extends unemployment benefits. The other tax break allows companies that are losing money recoup taxes they paid on profits earned over the last five years.

Although it is terrific for homebuyers to hear about the extension, the economy is still struggling greatly. Sen. Max Baucus believes it is up to Congress to continue acting creatively in order to get the economy back on the right track. Over time these kinds of tax breaks will contribute to people fighting through the recession and finding steady jobs, said Baucus.

tax credit for homebuyersOutside of homebuyers, the real estate industry has really been pushing for an extension on the tax credit. While 1.4 million first-time homebuyers have taken advantage of the incredible deal, the National Association of Realtors has estimated that 350,000 would not have purchased a home without the credit. This goes to show you what a little help can do to get people to make big decisions.

In all, the extension and expansion is going to cost the government around $10.8 billion in lost taxes. Although there was some questioning behind the decision, in all it passed the Senate by an overwhelming 98-0 vote.

There are other details you will need to pay attention to as the credit is only available for the purchase of principal homes that are $800,000 or less. It is phased out for those who make $125,000 a year or more and joint filers cannot have incomes above $225,000. Anyone that is in the military serving outside the United States will be able to take advantage of the credit until June 30, 2011 for at least 90 days.

The tax break will help industries as well such as retailers, homebuilders and newspapers that may have suffered losses in 2008 and 2009. There is a smaller version of the tax break for companies who have revenues of $15 million or less that will be enacted in February. This will help provide companies a quick source of cash.

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Home Sales Rise For The Second Month In A Row For Coachella Valley

Coachella Valley continues to show signs of improvement in the Palm Springs Real Estate market with another stellar month in July. Despite triple-digit temperatures and a credit market that was sure to scare home buyers away, home sales still rose by a tremendous 17.4 percent. This marked the second month of double-digit gains.Palm Springs Real Estate

While things are looking up for home sales, the median price is unfortunately still looking down with a less than impressive $180,000 median. The last time it was this low was all the way back in 2001 and is much lower than the median price of $274,000 just a year ago. With the remarkably low prices, there is no question why home sales numbers continue to increase.

If you are looking in the market to buy, now is the time. As a first-time buyer with cash and strong credit, you have the potential to find a deal that is unlike anything seen since the 1980s. But the $100,000 to $200,000 range is not the only price market that is increasing in sales. The high-end market is showing signs of improvement little by little.

As with most areas around the country, sales were particularly heavy in areas with a large amount of foreclosure. Indian Wells Palm Springs Bank ForeclosuresReal Estate saw the most drastic signs of increase in sales with numbers rising 100 percent. In all there were sixteen sales for the month with the highest at $3.8 million.

In homes that have been purchased in Southern California above $417,000, purchase loans rose to its highest mark since August 2008 at15.1 percent compared to 15.6 percent in 2008. However, before 2007 nearly 40 percent of all Southland sales were financed by these high-priced loans.

One thing is for sure; realtors all over are anxious and excited for what is transpiring into a terrific season. Many believe real estate sales have hit the bottom and are only going to go up from here. Although prices will undoubtedly remain low for some time, it is only a matter of time before they begin to increase as well.

As for the high-end homes, realistic prices are what some believe is helping increase sales. While homes in the $800,000 range have been selling like crazy, homes around $1 million to $2.2 million are beginning to se offers as well.

Inventory on Palm Springs Bank Foreclosures is declining as well as Riverside County saw 58.7 percent of all homes that resold were foreclosure resales. Despite this, it is still lower than it has been since AIndian Wells Real Estatepril 2008. While foreclosures were impacting the median price at one point, it is not having quite the same effect today thanks to the rise in high-end sales.

There is no question that the increase in sales is promising, but DataQuick President John Walsh fears it is too soon to call a bottom. With the amount of future job losses and foreclosures, he feels it is not appropriate to say the market has bottomed out just yet.

Another thing that is uncertain is how the high number of mortgage defaults from early in the year will be handled. There are too many options and variables that could affect the market in the long-run.

What you are seeing is that banks are not simply putting property back into the sales market right away. With the stabilized inventory that is taking place, there may be some increases in price. But for now, all we can do is sit and wait to see exactly what the market will do.