There are many benefits to the stimulus bill that passed Congressed to the real estate market. One of the best benefits, according to the National Association of Realtors, which is an organization representing more than a million of the country’s real estate associates (of all types) is the benefit that some of the funds within this build are designed to help stabilize the local communities.
Why They Need Help
Like virtually everything else in the economy, the real estate market has been hard hit due to the downturn. Some blame the housing market for putting this economic downturn into play. Regardless, the failure of the markets has resulted in pain across the board. For example, so many homes have been foreclosed on in some neighborhoods that each street has one or more signs of homes for sale by banks. Some homes have simply been abandoned. They are vacant. Foreclosures and vacant homes add to the neighborhood’s increased crime rate. The problem is, some cities have had to trim back on their services and on their employees. The result is fewer police officers on the streets even though there is increasing difficulties.
Another way to look at the problem is to note what has happened to so many neighborhoods with these vacant homes in terms of property values. Property values have fallen significantly. 20, 30 or more percentage of property value has just been wiped clean. This means that those who currently own homes and wish to sell them cannot do so without taking a serious cut. Others may be forced to foreclose due to the inability to sell property.
As you can see, there is a real problem when it comes to these homes sitting on the market, unable to be sold or unwanted.
How The Bill Changes Things
One thing that the economic stimulus bill has done, is to offer cities a bit more help. The plan gives cities money to purchase these vacant properties. The city and purchase the property, clean it up and resell the property. They can also bulldoze it so that the vacant lot is less of an eyesoar in the community.
With cities being able to do this several benefits are seen. First, cities see stabilization in the real estate market. They can also see improvement in home values as these properties may not sell at a higher amount. In addition, they stop the house values from falling farther which has only made the difficulties even more difficult. Communities can finally stop the decline.
The Bill Gives More
The stimulus bill is doing a good amount to aid individuals in buying those homes, too. Now, individuals who are first time homebuyers (who have not purchased a home in the last three years) are able to get a substantial tax credit if they do so in 2009.
FHA also receives aid because now there is an increased ability to lend money since the stimulus bill has aided in creating higher loan lending limits. Overall, the benefit here is that individuals will be able to qualify to purchase a home more readily.
FHA loans are available for a growing number of people. If the stimulus bill has done anything, it is to encourage more people to buy homes. According to the National Association of Realtors, the stimulus bill could help to sell more homes. An estimated 300,000 first time homebuyers may be attracted to purchasing a home due to the tax break offered to them. Thousands more will find that funding they need through the availability of FHA loans. It is a great time to buy.