Can Housing & the Economy Recover?

"Oh what a tangled web we weave when first we practice to deceive."

The American economy is hurting with :

-a housing market that barely has a pulse
-extremely high unemployment
-a government swallowing up massive losses from bad mortgages
-billions in bailout money for " too big to fail " shark infested corporations
-banks unwilling too help troubled underwater borrowers
-banks unwilling to help struggling small business owners

All at the expense of the American taxpayer.

Is the tangled web beyond repair ? When do you draw the line and say it's time to start fresh ?




We've allowed our controllers way too much control. Our American dream, our pride, our independence and dignity have been compromised. Yet the dance continues. The song remains the same.

I can think of lots more cliche's while the politics and posturing continue at the expense of hard working poor and middle class Americans struggling to stay afloat.

What would it take to right the ship?

Perhaps it's time to begin to understand that we are entrenched in a system that doesn't work anymore. At least not for most Americans.

The opportunities to address the deterioration of the housing market should have been the number one item on the agenda in heading off the financial crises. We were once a nation dependant on housing, we now are struggling to survive without it. Home ownership which was a brass ring has become a nightmare for many American families. Opportunities for those who may be in a position to buy a home are presently endless. With so many underwater borrowers it becomes a challenge to find the few that are solvent and are wanting to sell. Folks with equity in their homes aren't terribly inclined to compete with the low ball prices of the foreclosure down the street or the neighbors short sale.

Owning a home in America will surely be a privilege in coming years. Even a status symbol much like it was when I was a boy growing up in New York City. Mom and Dad had six of us and we were renters until I was about 12 years old. It didn't mean much to me, but my father was probably as proud of buying that first house as anything he had done before or after.

Today's financially troubled underwater homeowner is truly only a renter with no equity and an out of touch landlord. After all how can you own a home without equity in it? Banks made bad decisions by tempting borrowers with unrealistic amounts of money based on the banks valuation of the real estate involved. Borrowers responded to relentless marketing and reasoning that they were or could be sitting on a pile of cash. The bank of course had little concern after packaging and selling the loans to investors like government sponsored entities Fannie Mae & Freddie Mac. Today these 2 corporations, after being seized by the government, continued bleeding cash to the tune of $150 billion. Oh by the way "seized by the government" at taxpayer expense. After all, anything the Feds do we pay for don't we?

Banks however continue to flourish and boast about improving stock prices and bottom lines while still paying out lavish bonuses. The criminals who created the mess go unpunished and even rewarded. Just look at Countrywide Home Loans for a shining example of these injustices. That CEO sold to Bank of America and bowed out with a fortune while avoiding any criminal charges.

The tangled web is beyond repair. The country needs fresh ideas with humble heartfelt leadership. Our greatest shortcomings may be that we want to believe in someone and that we go through life with tunnel vision. If America continues trying to fix things that can't be fixed simply because it benefits a few than the majority will continue to struggle as a result and we will evolve into a nation without a middle class affecting everything within it.







George Sinacori
GES Real Estate LLC

Homebuyer Tax Credit Causing Chaos

Sept 18, 2009

It seems as though the Federal Homebuyer Tax Credit in 2008 & 2009 did it's job to help boost home sales, although hundreds of thousands who took advantage of the credit are now be told by the IRS that they'll have to give it all back.

In it's typical fashion, the Fed has created confusion, and chaos with misunderstood stipulations, changes mid stream and language that even those who wrote it would be hard pressed to understand.

Over 2.6 million supposedly eligible buyers bought homes and filed for the credit receiving a total of approximately 19 billion dollars in tax breaks. Nearly half of those who received money for the credit on 2009 tax returns will have to return it according to a Federal audit by the U.S. Treasury. Additionally a recording error may cause the IRS to seek repayment from tens of thousands more even though they are entitled to it.

Part of the chaos is a result of Congress enacting 2 different types of credits according to when a homebuyer purchased a home. The rules in 2008 required repayment of the credit up to $7500 over 15 years. A zero interest loan. Congress later changed the program for buyers in 2009 eliminating the repayment requirement, although those who purchased in 2008 are still obligated to repay. (See my blog Homebuyer Tax Credit Changes.)

Confused yet? Don't be it gets better ! Apparently the IRS contributed to the chaos by recording the wrong purchase dates for approximately 73000 homebuyer in 2009, meaning that they will be asked to repay as if they purchased in 2008 under the first version of the bill.

If you purchased a home recently and took advantage of the credit, as many of my own clients did keep good records and have your accountant review the credit requirements with you. There so many variances and stipulations related to this tax credit that I would be all day listing them and in the end listing them in vein. After all the IRS, Treasury and Congress can create confusion whenever and wherever they choose to now can't they?

See my blog on Homebuyer Tax Credit Changes for more on the differences between the credits, purchase dates etc.

George Sinacori

GES Real Estate, LLC

561-306-6736

rebuygeorge@yahoo.com

Foreclosure Trends in Palm Beach County

In today's housing market it's no secret that Florida ranks among the top states in foreclosure activity and in property value decline. After a year of government spending, bailouts and intervention that distinction remains unchanged. Last month Florida received the 2nd highest amount of new foreclosure filings nationally, second only to California. Other than steep declines in home values and drastically reduced sales activity little else has changed in the Florida housing market through 2009. Although the new year promises a (different) housing market, current foreclosure trends indicate that the pace of foreclosure activity will continue.

Information obtained through RealtyTrac shows that foreclosure filings over the past 2 months in Palm Beach County, FL have increased. County wide, home prices have declined since June and apparently remained unchanged since September. RealtyTrac reports that 18,096 homes in Palm Beach County received some form of foreclosure filing. Interestingly the greatest value or savings as indicated by foreclosure sale price to average sale price was in Boca Raton where sales trends indicate an average sale price of $244,300 while average foreclosure sale price was $164,750. A difference of 34-35%.

Changes in the short sale process (selling a property for less than what's owed) now scheduled to become effective April 2010 may help some homeowners. Legislation has already been passed simplifying the short sale process by requiring lenders to make the application process uniform from lender to lender thereby reducing the time involved in closing a short sale and hopefully making them a bit more appealing to a ready, willing and able buyer. Many would be buyers shun short sales due to the lengthy process and lack of response by lenders to short sale requests, although when properly submitted the process does work.

If you or anyone you know are interested in buying or selling a property in South East Florida please call 561-306-6736 or email me for a no obligation discussion of todays foreclosure market and the short sale process.

Stimulus - American Recovery??

Now that "Stimulus" has become an everyday word we, the good tax paying, corporate rescuing, stimulus funding Americans find ourselves preoccupied wondering.... "what's in it ?" Even more important ..."what's in it for me ?" Relatively very little is the answer. But than as long as they throw us a bone here and there, we should be humbled and awe inspired at the abilities these great and powerful decision makers have in figuring all this complicated stuff out.

First let me say that they haven't even begun to figure anything out. I have lots of issues with the handling of the Economic Tsunami fiasco being called the "American Recovery & Reinvestment Act of 2009"

Providing banks with billions of dollars in (taxpayers) bailout money with no requirement as to how that money could be used should never have happened. But it did. Not addressing the core or root of the problem, which is housing is still another short sighted, arrogant, ignorant message that our fearless politicos unashamedly send. The message is simple, when it comes to housing banks are more important than individual homeowners.

I tend to look at economic problems in business as if they were a barrel of water with a hole in the bottom. Unless you plug the hole you'll never refill the barrel. In order to plug the hole we need to address housing which requires addressing property values as they relate to mortgages. Unless lenders agree to modify each and every mortgage to current market value the barrel bottom will remain unplugged. Marking down mortgages to market value could quickly stabilize housing. People could confidently sell a property at market without "permission" to reduce the amount owed from a bank allowing sellers to sell with their heads above water. Banks and lenders could concentrate on loaning money to borrowers rather than foreclosing on properties. Many buyers who have gone back to the sidelines after a horrific experience with a short sale attempt would come back into the market and begin buying again. This time directly from sellers. Buyers and sellers today are not market makers. In what there is of a housing market banks and lenders are today's market makers. In order for any free market to thrive and survive it must be comprised of buyers and sellers. When you take them out of the equation (one or the other) there is no market. Stabilizing mortgage values in housing will stimulate spending even further. Any homeowner having or anticipating problems going forward would feel much more confident spending if they weren't so preoccupied with the unknowns. Sellers of homes would again become buyers and stimulate new construction. Buyers of homes buy furniture, TV's, appliances, equipment. Corporations hire when consumers spend, consumers spend when they are confident in the future, housing has always been the key and from my perspective it remains the key. Plug the hole in the barrel before you throw more water into it or it will just drain out of the barrel as it has since the first stimulus attempt in 2008 under the previous administration. And the subsequent $700 billion failed corporate bailout last year. You can't fill a leaky barrel. Fix housing, reset mortgages to today's market value and we can restore the economy.

First Time Homebuyer Tax Credit
One of the items in the "new" Stimulus revisits a failed attempt from the previous plan. Last years legislation approved a First Time Homebuyer Tax Credit up to $7500 with certain restrictions. This shortsighted piece of legislative work required that the credit be paid back to the government, albeit interest free, over a prorated period to the IRS and in full if you sold before it was fully paid back.

The "new revised edition" of First Time Homebuyer Tax Credit allows up to an $8,000. tax credit or 10% of the value with no requirement to repay. Provisions come with income levels that begin to phase out for individuals earning over $75,000 and married couples filing jointly earning more than $150,000. It is available to First Time Homebuyers (anyone who has not owned a home in the past 3 years) buying a home between Jan. 1, 2009 and Dec. 1, 2009 . The credit is forfeited if the property is sold within the first 3 years of ownership.

"Hooray" they got it right this time but my goodness why do they have to fail before the light goes on. Is this going to help? The last measure was an absolute failure and this one is doomed as well until the correlation between home values and outstanding mortgages are seriously attacked.

I'd be remiss if I failed to mention a couple of other "perks" from the stimulus, unrelated to housing that you may benefit from.

- In 2009 you are eligible to receive a tax credit up to $400 per individual and up to $800 per married couple based on 6.2% of your earned income. This fades once incomes of $75K for individuals or $150K for couples are reached. You are eligible whether or not you have a Federal tax liability. This according to a summary of the stimulus bill that the Senate Finance and House Ways and Means committees released.

- If you're fortunate enough to be able to buy a "new" car this year the taxes both State and Federal are deductible. Stipulations are on income limitations.

- Unemployment benefits are not taxed up to the first $2400 of benefits you receive.

- Health Insurance. If you get fired, your company is required to allow you to pay to keep your health insurance, generally for up to 18 months. Now, the federal government will subsidize 65 percent of the premium for up to nine months. You need to have been forced out of your job between Sept. 1, 2008, and Dec. 31, 2009. There are also income limitations in the year you receive the subsidy.

Here's a link to the text of the Legislation which at this writing had not been signed into law by the President.

I've attempted to list some of the items that you and I may directly benefit from as the hundreds of billion of dollars are dispersed in yet another attempt by a clueless Congress, Senate & Administration to "get our economy back on track."

Please call me directly with any questions relating to mortgages, home values, loan modification, refinancing, or buying or selling a property.

George Sinacori

561-306-6736

877-566-2430

rebuygeorge@yahoo.com

http://www.ges-realty.com/

The Ups and Downs of Florida's Housing Numbers

Are we beginning to see some light at the end of the Florida Housing Tunnel? According to the Florida Association of Realtors recent MSA (Metropolitan Statistical Areas) reports some areas although still showing declining values are reporting increases in sales. Most notably in South Florida the Ft. Pierce - Pt. St. Lucie MSA which includes St. Lucie and Martin Counties show a monthly increase in sales of existing single family homes through second quarters of 2008 of 34% as compared to sales volume in the same period of 2007. Another MSA that may be on the mend is the Ft. Myers- Cape Coral area reporting an increase is sales of existing single family homes in the second quarter of 2008 of 38% over the same period a year ago. The West Palm - Boca Raton MSAs sales of existing homes is off by only -3% compared to the same period a year ago and may be beginning stabilize into the next half of 2008.

These same areas show similar trends in sales activity for condos with Ft. Pierce - Pt.St. Lucie unchanged, Ft-Myer - Cape Coral an increase of 15% and West Palm - Boca Raton up 6% over a year earlier. Although inventory remains high and prices are still declining some buyers may sense that prices in these areas are now at an affordable level. The MSA numbers include sales of foreclosed homes and of course any short sales that may have been closed as well. Foreclosure sales may account for a good portion of the increases and that may be a positive sign in itself.

Eliminating any of the inventory regardless of how modest the upward trend in sales may be or how it affects prices may be the light that helps lead Florida into a more stable housing market.
Contact me directly for more on the most recent Southeast Florida homes and condo prices, sales and foreclosure activity.

George Sinacori 561-306-6736 or rebuygeorge@yahoo.com

First Time Homebuyer Tax Credit

One of the provisions of the new Housing and Economic Recovery Act of 2008, signed into law by President Bush on July 30, 2008 provides a First Time Home Buyer Tax Credit. The tax credit is available to qualified first time homebuyers. A first time homebuyer is anyone who has not owned any property in the past 3 years.

- As defined in H.R.3221 Section 36: " FIRST-TIME HOMEBUYER

- The term `first-time homebuyer' means any individual if such individual (and if married, such individual's spouse) had no present ownership interest in a principal residence during the 3-year period ending on the date of the purchase of the principal residence to which this section applies.""In the case of an individual who is a first-time homebuyer of a principal residence in the United States during a taxable year, there shall be allowed as a credit against the tax imposed by this subtitle for such taxable year an amount equal to 10 percent of the purchase price of the residence."
Note: the property may not quailfy for the credit if it is purchased from a relative.

The first time homebuyer tax credit is available to buyers of a primary residence purchased from April 09, 2008 through July 01, 2009. The allowable credit amount is 10% of the purchase price up to a maximum $7,500. Single tax payers with modified adjusted gross incomes up to $75,000. are eligible for the credit and married couples with combined modified adjusted gross incomes up to $150,000 are eligible. The credit is temporary and the amounts taken are recaptured (repaid) in future tax years, up to 15 years of ownership, or when the home is sold.

The new measure is part of the Housing and Economic Recovery Act of 2008. It should stimulate prospective homebuyers who may already recognize the bottom of the market but need another incentive to buy a home in the near future. The First Time Homebuyer Tax Credit is available through June 30, 2009 to qualified buyers. In all probability it will not be available beyond that date. It is a temporary economic stimulus.

Consumers are demonstrating interest in the measure according to the activity reported by the National Association of Home Builders Federal Housing Tax Credit website.

Other provisions of the H.R.3221 include FHA Modernization which increases FHA insured loan amount to 115% of an areas median home price up to a maximum of $625,500 which may in effect allow more working families to take advantage of FHA insured loans. The provision will also allow FHA to guarantee $300 billion to refinance mortgages where homeowners may be facing foreclosure.

Anyone needing more information on the tax credit or on the new loan limits and down payment requirements for FHA insured mortgages or on refinancing into a new loan can contact me directly at 561-306-6736 or email me or visit my website www.ges-realty.com