Susie asked about the $8,000 tax credit, and CR was ablaze with 300+ comments yesterday after this article appeared in the N. Y. Times:
Joseph and Chassity Myers are among the two million buyers eligible for the credit this year. The newlyweds heard they could get money from the government for something they were tempted to do anyway.
“It was a no-brainer,” said Mr. Myers, a commercial underwriter. “Owning something is the American family dream.”
The couple bought a two-bedroom condominium here in the spring for $171,000 and amended their 2008 taxes immediately, receiving their windfall by direct deposit a few weeks later.
Their home is now a monument to the government’s generosity. They bought a leather couch, a kitchen table, a bed, television stand, china cabinet, kitchen table, coffee table, grill and patio set.
“We did exactly what the government wanted us to do,” said Ms. Myers, a third grade teacher. “We stimulated the economy.”
Buyers like these above will probably go on to live happily ever after, and good for them. But the $8,000 tax credit is small potatoes in the stimulus world, compared to what’s coming.
The biggest stimulus package in the history of the world is upon us.
“Stealing One From The Bank”
As more bank-owned properties hit the open market, today’s buyers, already frustrated with the lack of inventory, will swarm to new meat – the well-priced REO listings.
Carmel Valley is the best example, because the product line is so similar – it’s the only place in North SD County where all you see are tract homes built in the last 25 years. The CV pricing last month was $327/sf for the 38 detached homes that closed in August, which has been steady.
There are 90 properties on the default list in 92130.
If 30 to 60 of them hit the open market over the next six months at $300/sf to $320/sf, they will IGNITE the marketplace.
Buyers will be scrambling to buy, because they won’t be paying any more than they had planned to pay, even after the overbids, and they’ll have the bragging rights that they ‘stole one from the bank’.
Look at how crazy people are about $8,000 – do you think they’ll be even crazier about stealing one from the bank? Bet on it.
ARE THE REOs COMING?
This morning I received my third REO assignment in the last 2.5 weeks:
4 br/3 ba, 2,288sf
Lot = 7,000sf
SP: $800,000 2/06 100% financed
LP: $650,000 short sale that failed
Trustee Sale O-Bid: $535,500 9/14/09
Remarks from last listing: Extremely interesting 2 story home west of I-5 in olde Carlsbad.Approx 2300 sqft. Home features gargoyles, hardwood floors, french doors, vaulted ceilings, dual pane windows, new appliances, ocean view wrought iron, built in storage. Additional detached 600sqft building in back.Walking distance to beaches and ‘The Village’.
The REOs are coming – look for their sales to take off like a rocket. Yesterday we saw that there were 657 bank-owned properties listed as actives, the contingent and pending REOs total 1,584. Do you think buyers will flock to a 2,288sf house west of the I-5 freeway in downtown Carlsbad that has an extra unit for mid-$500,000s, even with the gargoyles? Count on it.
People love bank deals – we don’t need any other stimulus than a pure marketplace!