Here's our take on the Stimulus situation as it pertains to the real estate market.

There are three primary components of the Stimulus package and the recently announced Treasury Plan that impact the residential real estate market:

Loan Limits Raised in High Cost Areas

Government backed loan limits were raised in high cost areas. That doesn't have a direct impact on our Spokane market, but it does help some of our feeder markets. When the markets are stabilized in places like Seattle and California it is easier for buyers to migrate into our community. More buyers = quicker stabilization of prices and the return to slow and steady appreciation.

The Tax Credit is Now a Real Tax Credit

The tax credit for first time homebuyers will be raised to $8,000 with NO payback [a true credit]. There are some qualifying parameters but essentially, if you earn less than $150,000 as a married couple, or $75,000 as an individual and have not owned a home in the previous three years, you qualify.

Relief for Distressed Homeowners

Last week, the US House of Representatives passed the American Recovery and Reinvestment Act (H.R.1). This bill has some key provisions that will stimulate the housing market:

It will restore FHA, Fannie Mae and Freddie Mac to 125 percent of median home prices - up to $729,750

Two days ago, the Senate approved an amendment to their bill that offers up to a $15,000 tax credit to people that purchase a home in the next year.  The credit would apply to anyone, not just first time homebuyers and you would not need to repay the credit.  The credit is based on 10% of the purchase price of the home and the credit is spread over two years.  So for example, if you buy a house with a purchase price of $300,000, you would qualify for the maximum credit of $15,000.  The first year you claim the credit, you receive $7,500, and you would receive the remaining $7,500 the next year.