Austin Property Talk

Stimulus Bill Affects?

So if you haven't heard, the $787 billion dollar federal stimulus bill is set to be signed into law tomorrow by President Obama. If you are not sure what exactly is being passed, don't worry, you are not alone.  I try to keep my nose out of the politics as much as possible and besides, who in their right mind has time to read through a 1071 page bill (apparently not even those who voted on it). 

The question remains though, what affect will this stimulus bill have on the housing industry? There was much speculation that the bill would perhaps include home buyer tax credits up to $15,000 or $22,000 and that somehow mortgage rates would be uniformly dropped to 2.99-4.00%.  

However, it appears in actuality, when the bill is finally signed into law, it will be more about preserving what we already had as opposed to providing monumental change for buyers, lenders and the industry.

Charles McMillan, President of the National Association of Realtors sent out the following letter to NAR members yesterday summarizing the important details of the bill in regards to the real estate market. 

Here's our take on the Stimulis Bill and Treasury announcements made this week. We look at the Stimulus 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.

More than anything, what the signage of this bill will do is end the speculation.  Many home buyers were/are in a holding pattern waiting to see what would be passed.  Now that we know, its time to take action.  2009 will present a tremendous buying opportunity for those who are motivated, intelligent and decisive.  The buyer's tax credit (up to $8000 now) and removal of the repayment clause are great incentives for first time buyers. 

What does this mean for you personally?  Give me a call or shoot me an email and lets discuss your specific situation and determine your best course of action.

The Mental Filing Cabinet is Full!

Over the past 3-4 weeks, there have been a number of educational events, classes and business seminars that have caught my eye.  This is a good time of the year to fulfill mandatory continuing education requirements and spend some quality time learning while the real estate market is awaking from its winter slumber.  I'm a firm believer that during this lull in the economy, you are either learning and progressing or falling behind those who are most successful in your field. 

That being said, I was scheduled to attend a half day business development seminar today and I just couldn't pull the trigger.  I think my brain is officially on mental overload.  The filing cabinet is full at the moment. 

There is no shortage of great, creative ideas and I seem to be finding more and more.  I can always take away 1-2 cool ideas or strategies that Id like to test out in my business.  Where I get myself in trouble is that two becomes four and four becomes eight and eight becomes twenty.  Pretty soon Ive got notes all over the place and if I don't take the time to create an action plan to implement some of the ideas, nothing productive ever gets accomplished. 

Seth Godin wrote in his book Tribes, "there is no shortage of good ideas, what is missing is the will to
to make the ideas happen." 

Its time for me to take a step back and become clear about what is most important at this point in time, where I am going to focus and how Im going to get there. 

So what did I do with the 4 hours that I saved by not attending the seminar?  I watched a 2 hour online webinar on "Winning with Social Media."  Hey, awareness is the first step, right.  There is just too much good stuff out there.

I vs. E

A couple of weekends ago, Kristin and I attended a pre-marital workshop.  Naturally, the theme of the weekend was communication and taking responsible for your own actions.  For one of the exercises, we had to fill out a personality profile similar to the Meyers-Briggs. 

The purpose was to understand the way that your spouse views his/her surroundings and how he/she responds.  It was not much of a surpised that I graded out higher on the introvert scale than extrovert.  Its no secret that Im rather introspective.However, as we went through the results together, I was surprised to find that the I and E labels have less to do with the way in which we interact and more to do with the manner in which we process information. 

One of the biggest frustrations that I experience in my daily and business life is when a person says or indicates that they are going to do something or be somewhere and then they doesn't follow through.  Over the course of our discussion, I had a revelation that perhaps I'm just as much to blame as the person that I feel has not kept his/her promise. 

What I learned was that people who process information like I do, tend to deal in facts and absolutes.  When someone throws out a statement that seems to be an intention, I tend to take it literally and plan accordingly.  I usually end up disappointed and frustrated if it doesn't work out as I had planned.  Well, apparently not everyone processes information that way. 

Others (most E's) may suggest an idea or make a statement and think nothing of it.  This disconnect can often lead to unnecessary frustration and break down in communication.  In other words, if you think someone said that they were going to do something, its best to get a firm confirmation before making assumptions. 

I plan to make a concerted effort to put this into practice; to be more patient and to try to understand the way that others process information as opposed to making quick judgments and assumptions.

To Blog or Not to Blog

One of my favorite quotes is by Theodore Roosevelt, "Far better is it to dare mighty things, to win glorious triumphs, even though checkered by failure . . . than to rank with those poor spirits who neither enjoy nor suffer much, because they live in a gray twilight that know not victory nor defeat."

What does that have to do with writing a BLOG and a real estate one at that?  Well, not much.  What resonates with me about the quote is that most valuable experience that we gain in life is by doing.  By getting our hands dirty, by failing and triumphing, learning and writing, we are able to chronicle our experiences perhaps for the benefit of others. 

 One of my sincerest passions in life is to teach others about things that I have learned.  Ultimately that is my purpose for this BLOG.  Its something that Ive been wanting to do for the longest time.  Its time for me to get off the sidelines.  I believe in most service related businesses, transparency is essential in building relationships and I definitely don't mind sharing.

Ive always had a goal in life to write a book.  Perhaps this is the closest that Ill get for the time being. I hope that you enjoy this journey with me.