Is that a light at the end of the long, dark tunnel otherwise known as the Great Housing Meltdown of the 21st Century? It might be.
We've recently seen some of the most encouraging statistics for the housing market in some time, including North Fulton real estate. Housing starts nationwide jumped for the third straight month in May, by over 17 percent- "fresh evidence that the beleaguered housing market is beginning to stabilize," opined the Wall Street Journal. Closer to home, AJC Business columnist Thomas Oliver recently quoted a local expert who notes that the excess supply of houses is finally beginning to be absorbed.
Oliver also listed seven major economic development projects that have closed in recent weeks, which will add 4,000 new area jobs. With new jobs come new residents, more demand for housing; and in time, higher North Fulton real estate prices.
A reasonably factor in the positive housing statistics may be the efforts that have been undertaken by the federal government to help turn the housing market around. One of the first was a new first-time homebuyer tax credit that was part of the $ 787 billion American Recovery and Reinvestment Act (aka the Stimulus Plan) that was signed by President Obama in February.
If you qualify as a "first-time homebuyer" you may be able to receive up to an $ 8,000 tax credit if you buy a home before November 30 of this year. The home must be your principal residence (second homes and investment homes do not count) and the credit phases out for higher income couples and individuals.
In addition, Governor Perdue recently signed legislation that provides a state income tax credit of up to $ 1,800 for all purchasers of single-family homes in Georgia. Homes must be purchased by the end of this November and there are no income restrictions. One-third of the credit can be claimed in each of the next three tax years.
More recently, as part of its comprehensive Financial Stability Plan, the Obama administration has introduced the Making Home Affordable program, which is designed to "stabilize our housing market and help up to 7 to 9 million Americans reduce their monthly mortgage payments to more affordable levels , "according to the website http://www.makinghomeaffordable.gov
It consist of two parts:
o The Home Affordable Refinance Program is giving as many as 4 to 5 million homeowners whose loans are owned or guaranteed by Fannie Mae or Freddie Mac an opportunity to refinance into more affordable monthly payments. It's designed to help responsible homeowners who are current on their mortgage payments but have been unable to refinance because their homes have fallen in value and they have no longer have sufficient equity.
You may qualify for this program even if your mortgage balance is more than the current market value of your home, as long as the balance does not exceed 105 percent of this value.
o The Home Affordable Modification Program is giving as many as 3 to 4 million Americans an opportunity to avoid possible foreclosure and remain in their homes by restructuring their mortgages to reduce monthly payments. It's designed primarily to help those who are struggling to stay current on their mortgage payments, or who have already fallen behind, due to a drastic rise in their payments as a result of interest rates that have reset on adjustable rate mortgages (ARMs).
You may qualify for this program if your mortgage payment is more than 31 percent of your pre-tax monthly income and is no longer affordable. Visit Makinghomeaffordable.gov for more details on both these programs, including aging calculators.
Of course, only time will tell when the housing market has actually "hit bottom" and started to normalize again. "Normal" home appreciation has typically been in the 3-4 percent per year range, not the double-digit rises that were common before the bubble burst and proved to be unsustainable.
Fortunately, most North Fulton real estate did not see these kinds of stratospheric rises in home prices, and so there are not experiencing as much pain on the way down.