Continue Reading Add comment November 5th, 2009
Giving troubled borrowers yet another way to avoid foreclosure, Fannie Mae said on Thursday it would allow eligible homeowners to rent their own homes.img src=”http://feeds.feedburner.com/~r/rss/money_realestate/~4/KnM3lH35-II” height=”1″ width=”1″/ Read more »
Continue Reading Add comment November 5th, 2009
pstrongUpdate:/strong Just heard from White House spokeswoman Jen Psaki. The start date for the new $6,500 credit for existing homeowners will take effect as soon as Obama signs the bill into law tomorrow (Nov. 6). Sorry for the confusion. And thanks to “Dean” whose comment alerted me to my error. (In case you’re curious, a href=”http://www.govtrack.us/congress/billtext.xpd?bill=h111-3548″this/a is the actual text of the bill. The credit extension was attached to a larger bill to extend unemployment benefits). /p
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a href=”http://www.businessweek.com/the_thread/hotproperty/archives/2009/11/latest_homebuye.html”My last/a post was flooded with comments from readers asking whether the expanded credit will apply to them even though they closed on a home purchase earlier this year (or last year or the year before…). The answer: “No.” /p
pIt might seem unfair. But the new credit will take effect only after President Obama signs the measure into law tomorrow. Buyers will have until April 30 to sign purchase contracts and must close on the house by the end of June. /p
pUnder the new $10.8 billion plan, first-time buyers would continue to get $8,000 for buying a home. But existing homeowners will now be able to claim $6,500 credit for selling their current home and buying a new one, as long as they resided in the home they’re selling for at least five of the past eight years./p
pIncome limits will also expand to $125,000 a year for individuals, and $225,000 a year for married couples. Sounds like a good deal right? Not judging from the flood of comments we’ve gotten from existing buyers who bought during the past several months. They feel gypped. /p
pA commenter identifying himself as “Jim” said he bought a home during the Great Recession and was miffed that he didn’t get a tax credit because he wasn’t a first-time buyer. Now he’s angry./p
p”If they are handing out free money, give it to those who actually risked their capital,” he wrote a couple hours ago. “I am against this credit altogether … The government deciding who gets money and who doesn’t is TYRANNICAL.”/p
pI sympathize with the comments. My parents only sold their Westchester County, N.Y. home of 30 years only a week ago and bought a much-less-expensive house one 15 miles away. They certainly would have qualified for the $6,500 credit and I’m afraid to break the news to them. /p
pBut the point of the credit is to stimulate home sales, not to hand out spending money (Though it will indeed stimulate some consumer spending). As I mentioned in a href=”http://www.businessweek.com/the_thread/hotproperty/archives/2009/11/latest_homebuye.html”my last post/a, it could be even less effective and efficient than the previous credit. If that’s the case, it’s best to put some limits on cost. Congressional analysts estimate that the six-month extension and expansion of the credit will cost taxpayers $10.8 billion. Can you imagine the price tag if it was made retroactive to the beginning of 2008?/p
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Continue Reading Add comment November 5th, 2009
pimg alt=”korea.jpg” src=”http://www.businessweek.com/the_thread/hotproperty/archives/korea.jpg” width=”150″ height=”65″ //p
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Waiting for a bus on my way to work I picked up a copy of the real estate sections of emThe Korea Times/em, a local newspaper serving the Korean community in Los Angeles. That’s right the real estate sections. There were two, a total of 32 pages of real estate coverage and advertisements in one day’s newspaper. This at a time when falling circulation and ad revenue forced the emLos Angeles Times /emto fold its separate real estate coverage into the business section./p
pFrom the ads it seemed the target was real estate investors. There were advertisements from agents that highlighted the income the properties throw off. That’s something you don’t typically see in mainstream newspapers. There were also brokers pitching 1031 exchanges, a way for real estate investors to defer taxes on sales./p
pI used to live in LA’s Koreatown neighborhood so I know a lot of money flowed into real estate development during the boom, some of it from South Korea. I’m sure a lot of folks lost money in the past few years. But those fat real estate sections—even though I couldn’t read most of what was in them—reminded me how entrepreneurial immigrants can be, particularly those from Korea. /p
pLacking in many cases the language skills to get jobs in Corporate America, Korean-Americans start their own businesses. LA has recently seen an explosion in Korean BBQ taco trucks, for example. Others still see real estate as a way to get their piece of the American Dream.br /
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