Congress Needs to Reinstate Higher Loan Limits

Statement from NAHB Chairman Bob Nielsen on the Need to Reinstate Loan Limits

Bob Nielsen, chairman of the National Association of Home Builders (NAHB) and a home builder from Reno, Nev., issued the following statement regarding the need for Congress to pass legislation to reinstate the higher loan limits for the Federal Housing Administration that expired on Sept. 30:

"Legislation pending in the House and Senate will restore the higher mortgage loan limits for the Federal Housing Administration and is essential to help stabilize the nation's housing financial markets.

"The FHA program is fully self-supporting, and a great example of a public-private partnership with lending institutions. Restoring the loan limits will provide millions of potential consumers in markets throughout the nation access to safe, affordable mortgage financing.

"To help mend the struggling housing market, stabilize home values, provide constancy while private investors re-enter the market and ensure that millions of creditworthy home borrowers can access the best possible mortgage rates, Congress must support this bill to help American families and get the lackluster economy moving forward."

Now is the Best Time to Buy a Home

Many potential home buyers are finding it difficult to filter out the media headlines and determine if now is the right time to buy a home. Most industry professionals agree buyers shouldn’t wait until prices and interest rates go up to buy -- now is the best time to buy a home.

Home prices in northern Nevada have dropped dramatically in the past few years and today’s mortgage interest rates are among the lowest in history. They’ve recently dipped again and borrowers can find a 30-year fixed loan for as low as 4.25percent. Rates were as high as 6.75 percent just a few years ago and in the double-digits 20 years ago.

As the economy rebounds the demands for mortgages will rise and so will interest rates. The effect of a rise in interest rates on monthly mortgage payments can be dramatic.

Based on the current median home sales price of $175,000, a 30-year fixed rate mortgage with a 4.25% interest rate has a monthly payment of $933 per month. At six percent the monthly payments increase to $1122 -- an increase of $189 a month. The total payments over the life of the loan increase by a whopping $68,040!

Home buyers that believe home prices will drop further could be making a very costly mistake. If the interest rates increase to six percent again, the home price would have to drop below $147,000 -- more than 16 percent -- to maintain the same monthly payments. House prices have begun to stabilize and bidding has become highly competitive, especially on the lower priced homes. It is highly unlikely that prices will drop that much.

Potential buyers frequently overlook the tax advantages of homeownership when considering if they should purchase a home. Mortgage interest and property taxes are great tax deductions.

While there are many variables to tax advantages, we estimate that a $175,000 mortgage with a 4.25 percent interest rate will generate $1,624 reduction in your tax liability annually.

This is the first time in four or five years that home prices and low interest rates have made northern Nevada an affordable place to live for most families. A family with a median income can afford to buy a median price home.

Low mortgage rates and affordable home prices will not last forever. The longer you wait the more you will have to pay to achieve your dream of homeownership!

Northern Nevada has many highly qualified Realtors, loan officers and builders that can be great help during your home shopping experience. To find more resources, contact the Builders Association of Northern Nevada at (775) 329-4611 or visit www.thebuilders.com.

Remodelers learn about the changing needs of the largest segment of homebuyers - Seniors

There are over 40 million adults over the age of 65 in the US right now. By 2020 more than half of the US population will be over 65. This is changing the way homebuilders and remodelers look at design and the concept of aging in place.

Chelsea Morris and Jeffrey DeMure from JDA Architects spoke at our Remodelers Council this afternoon. They addressed the changing needs of homebuyers and what they’re doing to match these needs. They’ve partnered with Eskaton Senior Residences and Services to put together a program called Livable Design. It provides a third party verified designation that meets the needs, or is adaptable to the needs of the aging population.

There were some pretty interesting things mentioned that I never would have thought of like replacing standard bathroom towel bars with fall rated bars. This could help a senior in a falling situation and could also be a great feature for younger families with children who like to hang from towel bars or yank on their towels causing the bars to fall.

Check out the Livable Design website for more information.

Builders Call For Housing Reform and Economic Recovery

Please watch this video of our members and share it with everyone you know!

Regardless of where you live or what industry you work in, the health if the housing industry affects you. Housing is accounts for 20% of the GDP and is huge source of employment.

President Obama and congress are looking at extending the first time homebuyer tax credit which will help. The National Association of Home builders estimates that extending the tax credit as-is for just one year will create 187,00 jobs. Expanding that credit to all buyers of a primary residence will create nearly 350,000 jobs - in just one year. Please, urge congress to extend and expand the tax credit now.

On the local level, we must tell local governments to stop making it harder for us to do business by increasing fees and the cost of construction. These costs are passed on to the consumer and new homes cannot compete with the foreclosures and short sales. We know they need to generate revenue but we have to find another way.

HOUSING = JOBS!

Best-selling author and nationally known real estate investment advisor says October 2009 will bring an end to the downturn.

Robert Allen announced today that in his best estimation we will hit a bottom to the real estate downturn this coming October and that now is a good time to buy. This comes on the heels of noted financial expert Jim Cramer's prediction that June 2009 would bring a bottom to the market.

"What's changed from a few months ago is that inventory has begun shrinking, bidding wars have started across the country, and prices are finally starting to rise in many markets. I'm encouraging all my clients to start looking for properties again," said Allen.

"Smart real estate investors who buy carefully during these years will not see better bargains for many, many years to come. For many, this will be the best buying opportunity of their lifetime. About every ten years, the circumstances converge to create amazing bargains. We will look back on these years with fondness, like we look back at 1974-1975, 1981-1982, 1989-1990 and 2001-2002… as times when the deals were plentiful and fortunes were made."

Read more...

Source: PRWeb September 4, 2009

Urge Congress to extend and expand homebuyer tax credit

The housing industry has recently seen a small boost in homes sales due to the $8,000 first-time homebuyer tax credit. The credit is set to expire on November 30, 2009, but in order to continue helping America recover from the recession, the housing industry still needs support.

Homebuilders across America are asking Congress to extend the $8,000 tax credit through November 30, 2010, and expand it to include all home purchasers, not just first-time buyers.

If Congress extends the tax credit program, it would spur 383,000 more home sales across the country; including 80,000 housing starts down the road as the increased sales help deplete the current inventory of unsold homes. This stimulus will create nearly 350,000 jobs over the coming year nationally…over 3,800 of those would be right here in northern Nevada.

You can make your voice heard by letting your members of Congress know that housing equals jobs, and to restore America, we must revive housing.

Call your members of Congress today toll-free at 866-924-6242 and tell them to:

- Extend the deadline for the $8,000 tax credit through November 30, 2010
- Make it available to all home buyers

Thank you for your help in letting Congress know that to restore America, we must revive housing.

Knowledge You Need to Stay UP in a DOWN Market

Knowledge is power, according to Doug Smith. But, Knowledge is not power without action. What actions can you take to help you stay up in a down market? Find out at The Builders Mid-Year Construction Analysis Wednesday at John Ascuaga’s Nugget. RSVP required.

Over $1.8 million in weatherization projects will begin July 1st

Starting July 1st, more than $1.8 million in funds will be available for the Low Income Weatherization Program in Washoe County. This program will upgrade and retrofit qualified homes to save money and energy. According to the State of Nevada Housing Division, more than 300 homes in Washoe County will receive the improvements saving 270,326 kilowatt hours of electricity and 25,207 therms of natural gas annually.

Hopefully this program, and others like it, will not only help us become a ‘greener’ planet but will create jobs and get our economy back on the road to recovery!

More information on the weatherization is available on the State of Nevada website.

What are your thoughts? We’d love your comments or stories about other programs like these!

HUD allows $8,000 tax credit to be used for downpayment

One of the biggest hurdles for many first time buyers is coming up with a downpayment. With housing prices so low, renters could easily find themselves making mortgage payments as low as what they currently pay for rent. If only they could come up with a downpayment.

Now they can.

New measures announced by HUD would allow FHA-approved lenders; federal, state and local government agencies; and FHA-approved non-profit organizations to supply home buyers short-term or "bridge loans" up to the amount of the $8,000 first-time home buyer tax credit.

Longer term loans secured by second liens can also be used by government agencies and FHA-approved non-profit organizations to facilitate home sales. Several state housing finance agencies have introduced such programs and a number of agencies are considering that possibility.

For more information, please visit the National Council of State Housing Agencies web site.

Previously, the home buyer would have been unable to access the tax credit until they filed their next annual tax return or an amended 2008 tax return and received the refund from the IRS.

Governor Gibbons signs tentative map extension into law

Good news for the building community! Tentative maps will now have a 4-year lifespan and final maps will be good for 2 years, with an additional 2-year extension allowed. We witnessed the Governor sign this bill into law today and it is effectively immediately.

Greg Peek, of ERGS Inc. and BANN past president, said this is a major accomplishment for builders and developers. ERGS has development project in Lyon County that had maps about to expire. The re-submitting process could have easily cost the developer hundreds of thousands of dollars.

If you have maps that re about to expire, please contact the planning department to make sure they are following the new timelines.

We Must Reset Property Tax at point of Sale

by Greg Peek

As our elected officials choose from a series of lesser evils to solve significant budget gaps, we have a perfect illustration of the fundamental unfairness of Nevada’s tax policy: we are too heavily reliant on business related taxes. A simple and fair way to raise millions in local revenue is to reset the assessed value of real property at the point of sale.

While sales tax, business tax, gaming tax, mineral tax, payroll tax, etc., are appropriate at some level, our reliance on business taxes has some nasty unintended consequences. Relying on single-industry taxes is akin to putting all your “eggs in one basket.” As we see today, if the industry slows, so does the tax revenue. Local governments are experiencing the whip-saw effect of our economic downturn. Continuing to raise business taxes and fees makes our state less attractive to out-of-state businesses considering relocation. We must make it easier to do business here, not more difficult. Lastly, the piling on of business tax and fees to pay for local governmental operations is fundamentally unfair.

Thirty years ago, the decision was made to depreciate homes 1.5% per year for 50 years (a maximum depreciation of 75 percent), reducing the property tax burden on the home owner and protecting long-time residents from being taxed out of their property. However, not resetting the depreciation schedule at the time the home is sold results in the new homeowner not paying his fair share by unfairly reaping the benefit given to the longtime homeowner. In essence, an individual purchasing a 50 year old home valued at $1 million is paying less property tax than a family living in a new $275,000 home.

Some have argued that resetting depreciation at point of sale violates the “uniform and equal rate of assessment and taxation” clause of the Nevada Constitution. The exact opposite is true: the current tax scheme violates the uniform and equal clause by treating homeowners differently. If the above owners are traveling the same roads, going to the same schools, being protected by the same police and fire departments, how is it fair that the owner of the $1 million mansion is paying less property tax than the family living the in the modest, starter home? Putting everyone on the same depreciation schedule from the time of purchase makes sense, is fair, and treats everyone equally.

Even California’s Proposition 13, on which Nevada’s tax cap was fashioned, includes a reset at point of sale. Resetting depreciation at point of sale would raise millions of dollars for local government. California got this one right. Why can’t we?

We urge our elected officials to seize the opportunity to institute fairness in real property taxation. Resetting real property deprecation at point of sale will protect existing homeowners from being taxed out of their home, raising much needed revenue in a fair and equitable manner. It is an easy solution to help bridge the gap in our governments’ budgets – a win-win action.

- Greg Peek is the Vice President of ERGS Properties and immediate past president of the Builders Association of Northern Nevada

Forecast 2009 & Beyond Keynote Speaker Elliot Eisenberg

Our Forecast event is next week and I put together a little sample video to show you that you will be enlightened AND entertained! Our keynote speaker, Elliot Eisenberg, is a Senior Economist from the National Association of Home Builders. Now, don't yawn here! I promise that Elliot will make you laugh and give you an easy to understand economic outlook.

This video is from an entirely different type of presentation in a different state but I think you'll see what I mean.



We'll also showcase the humor and intellect of Mark Krueger of Grubb & Ellis; A multimedia presentation from Tim Ruffin of Colliers International and a tag team - dual presentation from Kris Layman, President of the Reno Sparks Association of Realtors and Steve Schiller of Ticor Title.

Get complete details and register on our website or call (775) 329-4611.

Mike Dillon, Greg Peek, Mike Holmes and Bob Nielsen returned from DC today after joining more than 80 other builders from across the country to urge congress to Fix Housing First. The coalition, lead by the National Association of Home Builders, proposes a stimulus package that includes an enhanced home buyer tax credit, low mortgage interest rates and continued efforts to prevent foreclosure.

Mike Dillon, Executive Director of the Builders Association of Northern Nevada, reports that the meetings went well and all parties are hopeful for swift action to correct the housing crisis and flailing economy.

Read NAHB's press release or visit the Fix Housing First website for more information.

You can help the economy...FIX HOUSING FIRST!

The historic increase in foreclosures, tightened mortgage qualifying criteria, and general declining economic conditions have significantly cut demand for housing. Housing wealth is the primary source of savings for most households and a key driver of consumer spending. BANN is just one of the 600 + businesses supporting the Fix housing First Coalition, lead by NAHB.

The coalition plan suggests, a new home buyer tax credit would be substantially increased to 10 percent of the price of the home, up to $22,000. Unlike the current credit, it would not be limited to first-time buyers and the homeowner would not be required to repay the credit.

The coalition recommends a mortgage interest rate buy down to get buyers back in the market and further stimulate the economy. Suggested interest rates range from 3.99 to 2.99 %for homes purchased by the end of December 2009. Intensive efforts to prevent foreclosures and keep people in their homes are also included.

The stimulus plan will produce:
• 1.2 million additional home sales in the first wave
• Another 274,000 from a ripple effect
• Absorption of 211,000 vacant units
• 593,000 jobs across all industries
• $29 billion in wages and salaries
• $13 billion in small business income
• $20 billion in tax revenue for federal, state and local governments

Congress is currently crafting economic stimulus legislation that will most likely be debated and voted on by Congress in early January. It is expected that President-elect Barack Obama will sign stimulus legislation soon after his inauguration on January 20. Now is the time to tell Congress to fix housing first and ensure that housing recovery measures are incorporated into the stimulus package.

Here’s how you can help…visit www.FixHousingFirst.com and click on the “Tell Congress Now” link to send an electronic letter to Congress and urge their support for a homebuyer tax credit and short-term mortgage subsidy. In addition, ask Congress to re-examine the need for regulators and lenders to give leeway to residential construction borrowers who have loans in good standing.

Fix Housing First

We need your help! The Builders Association of Northern Nevada, in conjunction with National Association of Home Builders (NAHB), is taking decisive actions to push President-elect Barack Obama and the 111th Congress to revive the American economy by addressing the core problem to the current economic crisis...falling home values.

Tell Congress to Fix Housing First!

Visit FixHousingFirst.com for more information and a link to inform Congress.

Forecast 2009 and Beyond

Begin 2009 with a new perspective on the construction and real estate industry in northern Nevada. The Builders Association of Northern Nevada Sales and Marketing Council Presents
Forecast 2009 and Beyond January 14, 2009.

Featuring a panel of experts in their area of expertise:
Mark Krueger of Grubb & Ellis - Residential Land and Regional Overview
Tim Ruffin of Colliers international - Commercial Development
Kris Layman of REMAX Realty - Resale Overview
Steve Schiller of Ticor Title - Resale Overview
Elliot Eisenberg Economist for the National Association of Home Builders - Financial outlook

What will the new home and resale market do in 2009 compared to 2008?
What is the outlook for new job and population growth in 2009?
What are the issues facing our area and how will they effect growth?
What will the interest rate and stock market do in 2009?

Get the expert opinions an all this and more at Forecast 2009 and Beyond!

January 14, 2009 at Atlantis Hotel/Casino Convention Center from 7:15 am - 10:00am. Tickets are $40 per person before December 31, 2008 and $50 after January 1, 2009.

Building Green in Northern Nevada

One of the hottest marketing buzzwords these days is “green”. What does it really mean? Well it means different things to different people. To most homebuyers it means energy efficient homes. To some it goes beyond that and includes a home built with sustainable materials, maybe a source of clean or renewable energy like solar.

To the Builders Association of Northern Nevada it means Sierra Green. Sierra Green is voluntary green building program specific to northern Nevada. The Sierra Green Guidelines are built key areas of green building including:

• Lot design, preparation and development
• Resource efficiency
• Water efficiency
• Energy efficiency
• Indoor environmental quality
• Operations, maintenance and building owner education


These ensure that each Sierra Green home will benefit the environment, save the homeowners money on energy bills, provide healthy and comfortable living and have reduced maintenance costs.

Builders are looking for a competitive edge in today’s market. Sierra Green provides that by identifying the number one need of homebuyers today - energy efficiency.

Learn more about Sierra Green at http://www.thebuilders.com/sierragreen.php