Where Is The Lone Ranger When We Need Him?

Did the stimulus package provide the "silver bullet" we were looking for to stimulate the real estate market? Well I think it will help but we needed more than a $8000 tax credit for first time buyers. The National Association of Realtors (NAR) estimates that the stimulus plan along with lower interest rates and other mortgage relief measures, could help trigger an additional 900,000 home sales in 2009. In 2008, the available tax credit for first time buyers was $7500 and had to be paid back over a 15 year period. The new $8000 credit is truly a credit and comes off your income tax with no re-payment provided you live in the home for more than three years.

With job losses mounting and more households feeling insecure about the future, sales growth will be held back. New listings in 2009 will be down compared to 2008 which will be a good thing. We should also see a decline in short sales and foreclosures in 2009. If foreclosures and short sales do begin to reach a price bottom this year, we can expect some month-to-month price stabilization in the overall market in the second half of the year.

There has been a lot of uncertainty in the housing market, but there is more cause for optimism heading into this year than there was last year. Mortgage rates have not been this low in decades. Financing is still available and with downpayments as low as 3.5 percent. Affordability is improved. Foreclosures are showing signs of reaching the downside of the peak. Home sales are finally on an upward trajectory. Inventory is in decline. This is all happening as we speak.