More Foreclosures Coming? Prices Up!

Signals from the housing market are all over the map. On the bright side, the median sales price of homes is on the rise. But, at the same time, the Mortgage Bankers Assn. tells us that one out of every seven homes is now either delinquent or in foreclosure and will add to the housing inventory in 2010. The only explanation I can think of for rising prices amid cheap foreclosures is that the jobless rate is causing more expensive homes to come on the market.

The new wave of foreclosures isn't caused so much by tricky loans as it is by the high jobless rate. Since unemployment seems to be leveling off and is therefore poised to improve as the recession becomes a memory, I can only conclude that the increase in median sales price will pick up steam in 2010.

Homebuyer's Tax Credit & Interest Rates for November 16

We begin the week of November 16 with:

* Conforming, 30-year fixed up to $417,000 at 4.75%
* Conforming, 30-year fixed up to 729,750 at 4.875%
* FHA 30-year fixed up to $417,000 at 5.0%
* FHA Conforming, 30-year fixed up to $729,750 at 5.125%
* 30-year fixed jumbo up to $5M at 5.625%.

The new home buyer's tax credit at a glance.

Freezing Credit Prevents Identifty Theft

Most people never think of identity theft until it happens to them, but when it does the victim is in a world of pain and frustration that can take years to resolve. One of the best ways to thwart a would-be thief is to "freeze" credit reporting with the three credit bureaus. Everyone should probably do this.

Tax Credit Extended and Expanded

The federal tax credit will be extended through April 30, 2010, with a 60-day extension if a binding contract is in place prior to the deadline. First-time home buyers will continue to be eligible for a tax credit of up to $8,000, while existing homeowners will be eligible for a reduced credit of up to $6,500. To qualify for the $6,500 credit, existing homeowners must have lived in their current residences for at least five years.

The bill also increases the qualifying income limits from $75,000 for single tax filers and $150,000 for joint filers to $125,000 and $225,000, respectively. The purchase price of the home is capped at $800,000 in both instances.

As if that isn't enough incentive to would-be home buyers, taxpayers can even claim the credit on purchases completed in 2010 on their 2009 income tax returns.

This is sure to fuel the market for another five months.

Months of Inventory -- October 2009

Something that every buyer AND seller should know is the "months of inventory" in the current market. This information prevents a buyer from paying more than he needs to, and it guides a seller into pricing his home so that it will sell ... and for not less than it should.

We are talking about whether a geographical area is in a seller's market, a neutral market, or a buyer's market. As an example, here's how Long Beach stacked up this past October:

• Single family residences, all of Long Beach, no price limit: just barely a seller's market
• Single family residences, all of Long Beach, under $450,000: a stronger seller's market
• Condos, all of Long Beach, no price limit: just barely a neutral market
• Condos, all of Long Beach, under $400,000: just barely a seller's market

This information is available for all communities, not just Long Beach, it can be applied to any price range, and it can be geographically narrowed down to zip codes.