Housing Bust –Ideas to Cure & Prevent in the Future
Yale economics professor Robert Schiller on ideas to cure and prevent the current housing & mortgage collapse.
Robert Schiller is an academic, and best-selling author. He currently serves as the Arthur M. Okun Professor of Economics at Yale University and is a Fellow at the Yale International Center for Finance, Yale School of Management. Shiller has been a research associate of the National Bureau of Economic Research (NBER) since 1980, was Vice President of the American Economic Association in 2005, and President of the Eastern Economic Association for 2006-2007. He is also the founder and chief economist of the investment management firm MacroMarkets LLC.
Shiller is ranked among the 100 most influential economists of the world.
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You Call This a Housing Bust? – The Money Times
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HOME EQUITY CASH-OUT AT EIGHT-YEAR LOW
In the fourth quarter of 2008, U.S. homeowners cashed out $17.5 billion in home equity through the refinance of prime first-lien mortgages, the lowest amount since the first quarter of 2001, according to a recent Freddie Mac report. In addition, 14 percent of refinancing homeowners paid in extra money when they refinanced, reducing their mortgage debt, the highest cash-in share since the fourth quarter of 2004 when 19 percent of refinancing homeowners put cash into home equity. The share of refinance loans resulting in new loan amounts that were at least 5 percent higher than the paid-off first-lien mortgage balances fell to 62 percent in the fourth quarter, also at a four-year low, compared with 76 percent in the third quarter of 2008. <!–[if !supportLineBreakNewLine]–> San Diego housing market– In general, go with fixed when rates are low and an adjustable when rates are high. Many people have their own reasons for wanting to apply for a home owner secured loan online. One of the top reasons is because they have become past-due …
– Summary Post: New Home Sales at Record Low. by CalculatedRisk on 2/26/2009 08:34:00 PM. Another summary post and open thread (for discussion). New home sales in January 2009 (309 thousand SAAR) were 10.2% lower than last month, …
New Tax Credit for First-Time Homebuyers
Treasury Department Touts Expanded Tax Credit for First-Time Homebuyers
Credit Offers Up to $8,000 to Qualifying Taxpayers Now
Latest Move in Swift Implementation
of Administration's Recovery, Stability, Affordability Plans
Washington, DC � In an ongoing effort to deliver on swift implementation of the Obama Administration's recovery, stability and affordability plans, the U.S. Department of the Treasury touted today the availability of an expanded tax break for first-time homebuyers � a provision under the American Recovery and Reinvestment Act of 2009 that will make up to $8,000 available now to qualifying taxpayers who buy homes this year.
First-time home buyers represent a significant portion of existing single-family home sales. In 2008, nearly one out of every two homebuyers were buying for the first time, and the expansion in the first-time homebuyer credit will make it easier for first-time home buyers to enter the housing market this year.
"The expansion of the first-time home buyer tax break as part of the President's recovery agenda gives money to taxpayers when they need it most, while also targeting an important group of buyers," said Treasury Secretary Tim Geithner. "We view our economic recovery plan, our financial stability plan and now this homeowner affordability plan as three legs of the same stool � an integrated whole that represents our immediate response to the current crisis. We remain committed to swift, efficient and effective implementation of all of these components."
The announcement comes on the heels of the first Recovery Plan Implementation meeting led by Vice President Joe Biden at the White House this morning; Secretary Geithner was among several Cabinet secretaries to attend and offer updates on implementation efforts in progress at Treasury and its bureaus. Vice President Biden is overseeing the Administration's implementation of the Recovery Act's provisions.
The Internal Revenue Service (IRS) has posted on IRS.gov a revised version of Form 5405, First-Time Homebuyer Credit to incorporate provisions from the American Recovery and Reinvestment Act. Under the new law, qualifying taxpayers who buy a home this year before December 1 can claim up to $8,000, or $4,000 for married individuals filing separately, on either their 2008 or 2009 tax returns. Unlike the prior first-time homebuyer credit, this is money individuals do not need to pay back.
To view the form and additional information on who can and cannot claim the credit, income limitations and repayment of the credit, please visit IRS.gov. San Diego real estate sales
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New Home Sales Drop to New Low Record
Yesterday, existing home sales took yet another tumble,;today it's new home sales. The Commerce Department reported that new home sales fell 10.2 percent in January. This was the worst showing on records going all the way back to 1963.
Here in the West, new home sales plunged 28%. The majority of home sales in San Diego are distressed and bank owned homes.
With the Obama $8,000 home buyers tax credit now in place, it will be extremely interesting to view home sales for February. One can only hope that the $8,000 credit combined with the extremely low mortgage rates around 5% will at least stabilize our housing market. San Diego real estate
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The Mess That Greenspan Made: Existing home sales look for a new … – On a year-over-year basis, sales were down 8.6 percent and, what looked to be a bottom in home sales last fall (not to be confused with home prices), may now be giving way to a new lower range of activity. …
Existing Home Sales & Values Drop in January
The National Association of Realtors said today that sales of existing homes dropped in January to the lowest level in nearly 12 years. Some, did not expect this drop because sales had surged in December, providing some hope that the long-awaited housing market bottom was in sight.
The median sales price in January plunged to $170,300, down 14.8 percent from $199,800 a year earlier. That was the lowest price since March 2003.
Lawrence Yun, chief economist for The National Association of Realtors said: "Roughly two in five home sales are 'distress' transactions where the mortgage company must erase some of the original loan amount in order to complete the sale. We are seeing worsening economic conditions – loss of housing wealth and in the stock market… Very low confidence." San Diego real estate market
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San Diego Home Values Drop 24.8%
The latest Case-Shiller report shows San Diego homes lost 24.8% in 2008. Ihe 20-city index showed that no area experienced year-over-year price gains, the ninth straight month that has happened.
Below is the Case-Shiller 20 city detail:
Home Prices, by Metro Area
(About the numbers: The Case Shiller indices have a base value of 100 in January 2000. So a current index value of 150 translates to a 50% appreciation rate since January 2000 for a typical home located within the metro market.)
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Luxury home prices keep falling in California as market continues …
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National Home Price Index Drops 18.5%
The S&P/Case-Shiller 20-city report on home prices showed a decline of 18.5% in December 2008 from the same month a year earlier.
The index has fallen every month since January 2007. Home prices fell 18.2% in the fourth quarter of 2008, the largest drop in its 21-year history. The average price of a home has dropped by more than 25% after peaking in 2006. San Diego real estate market
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Real Estate Market Problems Solved
The answer to the problem is not to bail out people who commited fraud. This is my answer:
1) Allow everyone in the country to refinance an existing mortgage at 4%. This would put an enormous amount of cash in everyone's hands.
2) Only those who filed an honest financial statement when they originally applied for thier mortgage would qualify.
3) Push out amortizations to 40 years for those that are underwater.
For god's sake, don't allow judges to redo contracts. If this happens, every honest mortgage applicant in the future will pay a "redo" premium. San Diego real estate market
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The Government’s New Economic Stimulus Plan
The new economic stimulus package allocates $787 billion to boost our multi-trillion dollar economy. Here are some provisions individuals can take advantage of now.
1. Housing help. First time homebuyers can get up to an $8,000 tax credit if they close by November 30, 2009. This credit does NOT have to be paid back if you own the home three years. It phases out for single taxpayers making over $75,000 and for married couples filing jointly making over $150,000 (adjusted gross income). Communities receive $2.0 billion to redevelop abandoned and foreclosed homes. In 20 high-cost areas, the bill restores the $729,750 upper conforming loan limit for Fannie Mae, Freddie Mac and FHA loan guarantee programs.
2. Home improvement tax credits. For money spent to make homes more energy efficient, a 30% tax credit through 2010, up to $1,500.
3. Residential renewable energy tax credits. Dollar caps have been removed on the 30% residential credit for solar thermal, geothermal and small wind upgrades.
4. Income tax credit. This will be up to $400 for individuals earning up to $75,000 and up to $800 for married couples filing jointly with up to $150,000 in income.
5. Alternative Minimum Tax reduction. Exempts from the AMT up to $46,700 of an individual's and $70,950 of a couple's income in 2009.
6. Earned Income Tax Credit. For 2009 and 2010, goes from 40% to 45% of the first $12,570 earned by families with more than three children.
7. Higher education tax credits. For 2009 and 2010, a $2,500 per year tuition tax credit for all four years of college. It's now 40% refundable and covers textbook costs. The credit phases out for individuals making $80,000–$90,000 and couples earning $160,000–$180,000.
8. Hybrid vehicle tax credit. Increased to $7,500 for purchasing a plug-in hybrid vehicle.
9. Help for car buyers. In 2009, anyone purchasing a new vehicle for up to $49,500 can deduct state, local and excise taxes, as well as car loan interes t. This is an above-the-line deduction that can be taken even if you don't itemize. It begins to phase out for single taxpayers making over $125,000 and couples over $250,000.
There are many more programs for individuals, businesses and states, as well as a future foreclosure relief program – let's hope they all work.
… Have a great month! This post information was provided by: Greg Brooks southwest area manager San Diego Mortgage Network (800) 287-8292 x 225 San Diego homes for sale
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Obama’s Mortgage Bailout – Many Disagree!
Rick Santelli's Tea Party – Rick captures the mood of the country.
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Washington, like every other government with a central bank and a printing press, is locked on a course and will not be swayed.
It's a little late for us little people to start making a fuss. People are only now waking up to what the ruling class has done, and we're already in the handbasket halfway to hell. To expect the fine public servants we have placed in Washington to come up with a sensible course of action, completely disregards everything that has been happening for the last, say, 20 years! I guess it takes a lot to make Americans upset.
The only course is to try to ride out the storm. San Diego real estate agent
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