Look neighbors!! Redondo Beach is in the L.A. Times today. check it out:

http://www.latimes.com/theguide/events-and-festivals/la-et-neighborhood20-2009oct20,0,5686761.story

I was on the fence for a while as to whether Congress would extend the $8000 first time home buyer tax credit and whether the Administration would stand behind that, but I'm getting some clues that have pushed me over the side.

I think it may happen.

I've been asking Administration types for weeks now, one "on background" who said, "There are a lot of ideas out there for what to do with the extension of the home buyer credit and other credits, and those issues are not yet finalized from our perspective internally." So yes, he punted it.

I asked FHA commissioner David Stevens in an interview. He said, "We're looking at the first time home buyer tax credit. It's had an impact. It's being measured. The administration will come out with a recommendation and their position on where we stand on the tax credit. We'll support that position." Same kick.

An industry insider I know who went to a meeting with Treasury types this week said she came away feeling like "it was going to happen."

But yesterday Maria Bartiromo did an interview with Treasury Secretary Geithner, and while he didn't come right out and endorse an extension, he didn't punt it either; in fact, he hinted it would happen:

BARTIROMO: A lot of people say, well, what happens when the stimulus is gone?

You look at what happened with the cash for clunkers deal. We went from horrible to great to horrible again. The first-time homebuyer credit. So what happens when the stimulus is gone?

Sec. GEITHNER: ... We're not going to make the mistake many countries made in the past of putting the brakes on too early and creating risk that we have a, you know, weaker recovery with even higher levels of unemployment going forward.

Sec. GEITHNER: The Congress is carefully looking at a range of important things, like setting unemployment insurance, other types of programs that are critical to recovery...

Last week Congress' Joint Committee on Taxation put out a score (financial projection) of a potential extension of the credit.

It estimated the cost at $16.7 billion to extend it through June 2010 and expand it to all home buyers, not just first timers. Its estimate also figures in raising the income cap for eligibility to $150,000 for individuals and $300,000 for joint filers.

Concept Capital's Washington Research Group says this "strongly suggests that a mere extension of the program will be much less and refutes whispers in Washington that an extension alone could cost more than $15 billion. The Group also notes, "This amendment offers room for Senate Democrats to negotiate with House Democrats. In conference, Senate Democrats could agree to drop the expansion in exchange for House support of an extension of the credit until June 30, 2010. We continue to believe this is the most likely outcome."

Oh, and by the way, the House Ways and Means Oversight Subcommittee is holding a hearing next week on fraud involving the first time home buyer tax credit

*Courtesy of cnbc

Last Week in the News

Retail sales decreased 1.5% in September, following a revised 2.2% increase in August. However, excluding automobiles, retail sales rose 0.5%, more than the 0.2% increase economists had expected. Car sales fell 10.4% from their August high, as the ‘cash for clunkers' program expired.
The Commerce Department reported that total business inventory decreased 1.5% in August, following a 1.1% drop in July. It was the 12th straight monthly decline as retailers, manufacturers and wholesalers sought to cut inventory. Total business sales rose 1% in August, pulling the stock-to-sales ratio down to 1.33 months to exhaust inventories at the August sales pace.
The Labor Department reported consumer prices rose 0.2% in September. For the year, consumer prices are down 1.3%. This gives the Federal Reserve room to leave interest rates at record-low levels in a further effort to give the economy a boost.
Initial claims for unemployment benefits fell by 10,000 to 514,000 in the week ending October 10. The figure was lower than the 520,000 that economists had forecast. The number of people continuing to claim jobless benefits in the week ending October 3 fell by 75,000 to 5.99 million, the fewest since the week ending March 28.
Industrial production at the nation's factories, mines and utilities rose 0.7% in September, following an upwardly revised 1.2% increase in August. For the third quarter, industrial production increased at an annual rate of 5.2%, the largest quarterly gain since the first three months of 2005. The overall factory-operating rate rose to 70.5% of capacity in September.
The Reuters/University of Michigan consumer sentiment index for October fell to 69.4 from 73.5 in September. Economists had forecast a reading of 73.3.
Upcoming on the economic calendar are reports on the housing market index on October 19, housing starts on October 20 and existing home sales on October 23.

State home prices are forecast to rise 3.3% in 2010

By Muhammed El-Hasan Staff Writer Posted: 10/07/2009 11:11:39 PM PDT

Home prices in the Golden State will rise 3.3 percent in 2010, a mild increase but a major turnaround from the double-

digit annual drops witnessed for two consecutive years, according to a forecast released Wednesday.

The Los Angeles-based California Association of Realtors said it expects the median price of an existing single-family home in the state to rise to $280,000 next year.

The median price is the middle figure where half of homes sell for more and half for less.

Next year will "mark the beginning of the `new normal' for California's housing market," said James Liptak, the association's president, in a statement.

"This `new normal' likely will feature a steady stream of sales driven by distressed properties in the low-end of the market, coupled with moderate home-

price appreciation," the statement continued.

The forecast price reversal will be weaker than in previous rebounds, said Steve Goddard, a local Realtor who is the association's president-elect.

"Normally, the California real estate market just goes like gangbusters when it comes out of these recessions," said Goddard, a broker at Re/Max Marquee Partners in Manhattan Beach. "But this time, I think it's going to be slower."

However, that expected price increase is contingent upon various "wild cards" with highly uncertain directions, like foreclosures, loan resets, the labor market and the state's budget crisis.

For example, home prices could see "downward pressure should a heavier than expected wave of foreclosures come to market next year," said Leslie Appleton-Young, the association's chief economist, in a statement.

The South Bay's housing market will likely mirror the state as the whole, Goddard said.

But even a slight improvement in local home prices would come as a big relief for South Bay communities, which have seen dramatic annual price declines over the past two years, including in the high-

end beach cities and Palos Verdes Peninsula.

Statewide, the association forecasts a drop of 2.3 percent in resales for single-family homes to 527,500 units. Sales have generally been strong this year because of rising affordability and historically low interest rates.

Homes at the low end of the market - driven largely by distressed properties like foreclosures - will continue brisk selling. Sales of higher-end homes will remain relatively weak because of a tight credit market, where banks are requiring larger down payments and better credit scores before giving a mortgage.

As a result, the association expected distressed properties to account for nearly a third of sales in 2010.

"Housing in California has become a tale of two markets," Liptak said. "The low end continues to attract first-time buyers and investors, with a resulting shortage in the number of homes for sale. Sellers at the high end, however, continue to be challenged by the ability of home buyers to secure financing as well as their concerns about where prices are headed."

The association expected median prices to continue dropping "slightly" through 2009 and the first half of 2010 before leveling off in the summer.

Because of the forecast's predicted slow recovery in prices, people shopping for a home should not feel rushed about buying as soon as possible, Goddard said.

"This time it's going to be a little easier to take six months to a year to think about it and still get into the market and be OK," Goddard said.

He added: "Things are looking up. If you're looking for a house to buy and you find the right one, I'd be buying it now."

muhammed.el-hasan@dailybreeze.com

Kathy and I are currently leasing out 640 the Village #106. It is a FABULOUS unit!! Since this unit is located on the first floor it has one of the few OVER-SIZED decks with ocean views, perfect for enjoying evening sunsets and entertaining.

The Village # 106, Redondo Beach 90277

$1,395 a month 1 year lease. Owner may consider small pets

Enjoy the year round heated pool, bbq area with views of the surf, and spa all within the security of living in a gated community just steps to the Pacific.