Four key points you need to know from the most recent Senate agreements that I think will continue to give support to Santa Clara county housing price:
- FACT: The temporary high-balance conforming loan limit of $729,750 for high cost area will be extended through December 31,2010. The limit was previously set to expire by the end of 2009. IMPACT: This extension will provide more affordable loans to buyers in Santa Clara county. Every 1% difference in interest rate will bring around 10% difference in housing price. Current jumbo loan rate for 30 year fixed loan is more than 1% higher than the high-balance confirming loan rate. This extension gives big savings to buyers in Santa Clara county, especially for people who plan to buy houses in the 750k-1million range. Therefore, demand for houses in this range with decent schools in areas such as Santa Clara, Sunnyvale, Cupertino, West San Jose would continue to be strong.
- FACT: The deadline for the first time home buyer to claim the $8000 tax credit will be extended. According to the Senate agreement, buyers need to have a contract by April 30 and close by June 30, 2010 to be eligible. IMPACT: this coupled with the income limit increase in this new agreement will give more boost to housing market in high-income area like Santa Clara county. With higher income limit, more first home buyers will be able to eligible for the tax credit claim and thus will drive more fist time buyers into buying.
- FACT: The agreement also expected to expand the credit to allow current homeowners and more affluent buyers to claim the credit. Senators moved to increase its annual income limits from $75,000 to $125,000 for single buyers and from $150,000 to $225,000 for married couples. IMPACT: This higher limit makes more sense for the market here and are more in line with the average income level.
- FACT: Move-up buyers will get some benefits from the new Senate agreement as well. The above income limits apply to both first-time and move-up buyers. In addition, the agreement would also allow current homeowners to claim up to $6,500 as long as the property they are vacating has been their primary residence for at least five years. IMPACT: This is the most significant change in this new agreement and a very strong positive impact to the housing market.
Email me or call me at 408-799-2558 if you want to discuss further on how these new Senate agreements can benefit you and whether it is the appropriate time for you to take action to buy or sell houses.
