Housing and the Obama Stimulus Package

The President of the National Association of Realtors sent a status report to us regarding housing and the Obama Stimulus Package. Please contact us if you have any questions.

Dear Fellow REALTOR®,

Here's our take on the Stimulis Bill and Treasury announcements made this week. We look at the Stimulis package AND the Treasury's package holistically, in compliment with each other - mostly because that's how the Obama team is looking at it. Your representatives, the NAR Board of Directors, asked us in November to do 4 things (with an unspoken but clearly understood mandate to PRESERVE what we already have). Here they are: 1) get loan limits raised for high cost areas, 2) make the $7,500 tax credit NOT a loan, 3) try to find ways to push interest rates down (which are higher than they should be due to systemic risk right now) by 200 basis points, and 4) help provide solutions to the foreclosure/short sale problem.

So here's what we have achieved: 1) the loan limits will be raised to $727,000 in high cost areas, 2) the tax credit will be raised to $8,000 with NO payback [a true credit], 3) interest rates have come down 125-150 basis points, and 4) the bill has over $50 billion in it for foreclosure mitigation, with Geitners Treasury plan signaling that the second half of TARP and TALF will be used to mitigate foreclosures through a government guarantee, drive down interest rates by buying another $200-300 billion of mortgage paper from the GSES's thereby freeing them up to do the same with new mortgages, and Fannie has just agreed to lift the cap of 4 investment properties eligible for loans and raise it to 10.

In addition, we preserved what we have - which some tend to forget is always on the table when these negotiations start up again - mortgage interest deductability, real estate tax deductability, and the $250,000/$500,000 cap gains exclusion (an overall package worth more than $100 billion and for some a very attractive funding source for their pet projects).

We did make a run at the $15,000 credit -- and we would have loved to have gotten that or the Homebuilders $22,000 credit idea as well as their 5 year loss carryback deal, but they were considered too rich for this program. What it did do though is totally take the debate off of whether a tax credit should be reinstated at all (it expired last year) and whether it was a true credit or a repayable loan, and kept the conversation on how much it should be. It also kept the debate off of 'what we are willing to give up to get a $15,000 tax credit' and kept the debate again, on how much it should be. It's pretty hard to complain when they give you what you ask for and you lose something you never had.

While we study the Treasury specifics on their major role in providing the rest of the housing solution -- there is much more to come and we are working diligently with the Administration to help 'unclog the pipeline' and get capital flowing into housing again.

Sincerely,
Charles McMillan, CIPS, GRI
2009 NAR President

Magnificent New Construction By E.O. Reed

1405 Willow, Washington
Your search is over! Magnificent two story new construction in Bristol Park. Very open floor plan in this four bedroom and two and a half bath home with a fireplaced Great Room, Kitchen with hard surface countertops, Formal Dining, Informal Dining, & main floor laundry. This home offers hardwood and ceramic tile floors, arched doorways, rounded corners, vaulted ceilings, tray ceilings, 9’ ceilings on the main level and a 9’ basement. All four bedrooms are upstairs including a Master Suite with two walk-in closets. The Master Bath measures 16’X13’ with dual sinks, a walk-in shower, and a corner whirlpool tub. Bedrooms 2 & 3 also have walk-in closets, and the main bath also has dual sinks. Still time to make selections! Estimated completion date is mid-May. $249,900. See the listing for more details. Contact us if you have any questions.

Come see us in Pekin on Sunday

From 1:00 to 3:00 on Sunday, February 15th, we are having an Open House at two locations. We would love to see you!

2604 Sydney Place, Pekin
Quality built three bedroom, two bath home by E.O Reed. Located in Pekin's Marigold Estates, this 1490 sq ft ranch offers a large open floor plan with carpet and tile throughout. The kitchen has Corian® countertops and a breakfast bar. The living room has a gas log fireplace with electric and cable hook-ups above it for a TV. The split floor plan of the home offers some privacy for the master suite. A two stall garage and patio off the dining room finish off this completed new construction. $229,900 Check out the listing for more information.




315 Washington, Pekin
Absolute move-in condition! This three bedroom, two full bath home located in Pekin is a must see. The hand-crafted woodwork and trim throughout the house is beautiful. The huge kitchen has new cabinets, countertops, sink, and flooring. All appliances stay. Both bathrooms have been remodeled. The home offers a large formal dining room with built-ins. The three season sun porch has ceramic tile flooring and a built in bench. The backyard is completely fenced in. The full basement has a room that could be used as a den or a playroom for the kids. Immediate possession available. $119,900 Check out the listing for more information.

New Listings in Germantown Hills and East Peoria

206 Marvin, Germantown Hills
Amazing 3 bedroom 2 ½ bath zero lot line in Germantown Hills. Better than new with a partially finished basement with egress windows and a full bathroom. Built in 2003, this home has lots of amenities, including 2 laundry hook-ups, one on the main level and one in the basement, fully applianced kitchen with stainless steel appliances, computer area on both main floor and in the basement, Gas fireplace in the great room with hardwood floors and large bedrooms. Don’t miss this opportunity!! See the listing for more details. Contact us if you have any questions.

216 Turnron, East Peoria
Great two-story in East Peoria, Offering 3 bedrooms 2 baths and bonus room for extra space. A room on the upper level and one in the basement could be used as bedrooms or an office. With 1840 square feet of finished living space this home is ready for you to move right in. In the last 3 years, new gutter guards, hot water heater, kitchen counter top, kitchen sink, garage door, hardwood floors upstairs, storm door and boiler. Roof in 2002, windows in 2004. See the listing for more details. Contact us if you have any questions.

$15,000 Tax Credit for Homebuyers

The Senate voted Wednesday to expand the economic stimulus package with a tax break of up to $15,000 for homebuyers. The low government mortgage rate buy down and the $15,000 tax credit would be very beneficial to the housing market as well as the overall economy. We will probably never see anything like this again in our lifetime. To buy a home with a 4.5% interest rate, or lower, is very good. To add a large tax credit on top of it is really a no brainer if you are even thinking of buying a home. I think we all need something like this to go through.

Want to read more, check out these articles:
Senate OKs $15,000 Tax Break for Homebuyers, USA Today
Senate Adds Homebuyer Tax Credit to Stimulus Bill, NY Times

We would be happy to help you! Call or email us with your questions.

Just Listed in East Peoria

712 Meadows, East Peoria
Updated and well maintained two bedroom, one bath ranch with an attached garage. This home is in move-in condition. Updates include a new roof, all new flooring, fresh paint, and a newly redone three-season sun room. The home offers an eat-in kitchen with oven and refrigerator included. In a very convenient location! Check-out the listing for more details.

Area Home Sales Article in the Journal Star

Today's Peoria Journal Star included an article about area home sales. In 2008, PAAR (Peoria Area Association of REALTORS) reports 11.6 percent drop in home sales over the previous year and a slight increase in the average sale price. Pat McCarthy, President of PAAR, also commented "Most economists are saying it will be the middle of the year before we see a rebound in the housing market. We're hoping Peoria's a little stronger than that." Read the full article on pjstar.com

We all know the economy is struggling. We are overwhelmed with negative news each day. It is good to hear a little positive news too. Despite area home sales dropping, the Gillespie Group increased their home sales by over 10% in 2008. We are staying positive and continue to work hard to get the job done.