Obama’s Housing Plan

Photo by DJ XAVIOR on Flickr.

The economy is in shambles, the housing market has took a nosedive, the stock market decided to skydive from 14,000 feet, the retail sector is collapsing, people are losing their jobs to the tune of 600,000 per month, retirement accounts have tanked by 40% or more, ensuring people will have to work much longer than they ever intended to and oh yeah, we’re still fighting two wars on the other side of the world.

Given the current state of the union, I have to commend president Obama for marching into office and hitting the ground running. Within a matter of weeks, he had an economic stimulus bill waiting for his signature and now he’s taken a second approach by offering a housing plan that could help to stabilize the housing market, which is the biggest contributor to the economy becoming Swiss cheese.

There are a wide variety of options for troubled homeowners in the housing plan. While it doesn’t address every single scenario, the main point to extract is that if you are a homeowner in good standing with your mortgage lender and you are having problems paying your monthly payment, due to a shrunken income or to increased monthly payment due to a rate reset, then the federal government will work with the lender to modify your loan. The loan modification will work to adjust your monthly payment to a maximum of 31% of your gross monthly income. There are, however, many rules and restrictions to the housing plan. For instance, you must prove that you will be able to pay the new monthly payment, given your current salary. And if you have unfortunately recently lost your job, there isn’t a whole lot in this plan to help you. You also must live in the residence in question; this bill is not intended to help investors. Additionally, your mortgage can not exceed Fannie Mae or Freddie Mac loan limits, which are $417,000 in most areas and up to $729,750 in higher cost areas, like New York and California. So be sure to read the details carefully and if you still have questions about whether or not you are qualified to take advantage of the housing plan, then you could always contact your mortgage provider.

Obama Housing Plan: What You Need to Know [NY Times]
Q. and A.: Obama’s Housing Rescue Plan and You [NY Times]

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Housing Affordability at Record High's

Photo by on ~Bradford~ Flickr.

If everyone is talking about something, then there must be some truth to it...right or wrong? Not too long ago the media mostly spoke about how home prices were still too high, but now that home prices have fallen far enough, at least in many areas, housing affordability are at levels that haven't been seen in the past 40 years. That's not something to snarl at or take lightly! We might have a big debt problem, but we certainly don't have a problem with finding affordable homes these days. If you are someone who does not have the burden of swimming in a pool of debt, then you are a prime candidate for the smorgasbord of desirably priced homes that are available.

Back in 2005 personal incomes did not meet the requirements for buying a home at affordable means, which is what put us in this mess in the first place. According to a NY Times article, now that incomes are up and home prices are down substantially; if you want to buy a home today, act quickly, because the incentives available today I'm sure will be gone in the future. And no one can foresee when in the future that may be, so do you choose to gamble, or not is the question?


Housing Market’s Upside: Affordability [NY Times]

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NY Times and SIREN See Eye To Eye

Photo by lumaxart on Flickr.

I knew when I first started SIREN I was on to something. There have been many sources lately that are validating my thoughts on the real estate market. If the NY Times and I can see eye to eye, there is no reason you shouldn't either. It's ironic, but the real estate market did a complete 180 and the demographic of people who are brave enough to buy a home are not your typical Wall Street professionals with high bonuses that suffered huge stock losses, but rather the average day person with a modest income. According to Jessica Armstead, a broker at the Corcoran Group, there has been recent influxes of buyers in New York looking for apartments and homes that were not seen in previous months. This makes sense when you take into account that a large number of those people are first-time home-buyers and have seen home prices decline faster than the rents they pay. With 30 year fixed mortgage rates around 5%, steep depreciation in home prices and the tax incentives available, why would you waste your money on rent when your mortgage payments may be comparable to your rental payments. The biggest uncertainty for buyers is whether prices will decrease further, but I think there are a number of other variables that people overlook, which I mentioned above. If you break it down, even if prices go down further and mortgage rates start to creep back up, your interest payments will offset the savings you make on a lower priced home. I believe your decision will be based on various life scenarios and I’m curious to see over the next few years the people who will prevail and come out on top. The NY Times article below has some great examples and stories of buyers that were brave enough to look past the uncertainty of the real estate market and feel comfortable in purchasing a home.

For the Brave, the Moment Is Now [NY Times]

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Blast From the Past - Sand Lane Arcade

Approx. 25 Yrs Ago Steve Zaffarano/Staten Island Advance


Approx. 23 Yrs Later Photo by iamduckydale on Flickr

I want to pay homage to the once standing and thriving Sand Lane Arcade center that closed down in the summer of 2006. This establishment of pure innocence and fun was around for 66 great years, and went out on top. As they say "all great things must come to an end". From my grandparents, to my parents, and even me, we were all lucky enough to experience the hot summer nights in South Beach, at the Sand Lane Arcade, acting as giddy little kids from the sight of the bright illuminating lights coming from the arcade machines. Filled with timeless games such as skee-ball, pinball, Dance Dance Revolution (timeless for my generation :), ka-klunk and all sorts of video games, it was a kids haven. It was our own little Coney Island and South Beach was the hotspot for Staten Island residents. Great memories and I want it back...Who remembers coming here?

Summer Already Over for Staten Island Arcade [NY Times]
LIFE IS A BEACH... [Daily News]
Return South Beach to the good old days [SILIVE]

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Golden Age For First Time Home Buyers

Photo by PatchworkPottery on Flickr.

The housing market today is a very controversial topic in the media that people rarely take a moment to assess their own situations. Everyone's priority is different and although no one knows how to time the bottom, if you look over the past year bargains are definitely available, mortgage rates are at their all time lows and there are an abundance of tax benefits. There are still opportunities to buy new construction developments that are eligible for 421b tax abatement. Even if prices decrease further, if you are looking long term, I believe the next generation of wealth will be made in this market. The following NY Times article emphasizes the advantages first-time home buyers have if they choose to buy a home now. With constant talks about the federal government trying to drive down rates to 4.5% that is truly an incredible rate to lock into for the next 30 years. Also, income-eligible first-time home buyers won't want to miss the opportunity for a $7,500 federal tax credit, since the deadline is June 30th. Most people don't realize that first-time home buyers don't have the luxury of gambling on the market bottom. Once the market starts to turn around, existing home buyers who wanted to move years ago will quickly sell their current home to buy a step-up home.

We wouldn’t let another decline bother us, said Michael Proman. You can never time a bottom. This is a long-term investment for us (referring to their recent home purchase in Minneapolis), and it truly is the best investment we have in our portfolio right now.

It May Be Time to Think About Buying a House [NY Times]

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Exploring Staten Island by Foot

Check out this NY Times video about this reporter who takes a six day walking tour around the coastline of Staten Island. I don't know who in their right mind would do something like this, but it's pretty cool, and even I, as a Staten Island native found out some interesting things from this video.



Walking on the City’s Wild Side [NY Times Article]

Exploring Staten Island by Foot [NY Times Video]

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A Towering Economic To-Do List for Obama

I'm starting to wonder whether this country thinks Obama is some sort of super hero. Everyone feels that Obama will be our savior from economic demise, but there is a big journey ahead of him and our backs are up against the wall. I ponder to myself everyday, can Obama really come up with a solution to the laundry list of issues plaguing our society. At the end of the day all I, and the rest of the country can really do, is have faith and hope that everything Obama has promised us can be executed successfully.

The NY Times article I was reading really piles on the heat and discusses some of the crucial issues that economists say will test the new administration, and how it might address them. Read Full Article » [NY Times]

• Economic Stimulus
• Taxes
• Mortgages
• Federal Regulation
• Auto Industry
• Health Care
• Technology
• Energy
• Trade

What do you guys think about this? Can Obama bring us back to life from this dreary economy?

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