Congratulations President Barak Obama

Today the nation's 44th President, Barak Obama was sworn in. He has the support of Congress with legislation that will stimulate the economy and help the housing market.

Part of the economic stimulus bill is aimed at stimulating home buying and preventing foreclosures. The bill includes tax breaks for first-time home buyers, and a return to the higher loan limits in place for Fannie Mae, Freddie Mac and FHA.

The American Recovery and Reinvestment Act of 2009 is intended to create 3 million to 4 million jobs. The bill would provide $275 billion in tax cuts and $550 billion in spending in areas such as increased unemployment benefits for workers and investments in science and technology.

There are several real estate-related provisions, including returning FHA loan limit ceilings in high-cost areas to the higher, temporary limits put in place during 2008. The bill allows Fannie Mae and Freddie Mac to once again purchase and guarantee loans of up to $729,750 in high-cost areas such as Manhattan.

In the Economic Stimulus Act of 2008, the previous $417,000 conforming loan limit was raised to $729,750 until December 31 2008. As of January 1 2009 the limit was lowered in New York (high-cost area) to $625,000.

Unfortunately many buyers in Manhattan were not able to take advantage of the $729,750 temporary limit. It began in the spring of 2008 and coops were not included. It wasn't until the summer of 2008 that coop buyers were able to get the loans. A coop transaction usually takes 45 - 90 days from the time a contract is signed.

The $625,500 limit now in place in New York is better than the previous $417,000 conforming loan, but the real estate industry including the National Association of Realtors are pushing for a return to the higher limits. Borrowers who require "jumbo" mortgages larger than those eligible for purchase or guarantee by Fannie, Freddie and FHA pay higher rates.

Interest rates on jumbo loans are at least 2 percent or more higher than conventional conforming loans. The 2008 temporary limit of $729,750 was more realistic for Manhattan home buyers since the average price of an apartment in Manhattan is over a million dollars.

The past 2 Sundays here in Manhattan there has be a lot of activity at Open Houses. Last week I was with a buyer looking for an apartment in the $500,000 range. An open house we attended for a 500 square foot studio was packed with buyers.

Buyers with good jobs and decent incomes seem to be taking advantage of the current low interest rates and price decreases. Many buyers were out looking this past Sunday as well. At some open houses there were lines of boots outside the door at some buyers were waiting in the lobby to be brought up. Many of the properties had price drops and are still negotiable.

New Yorkers are excited about the Inauguration today, people are feeling optimistic about our President Obama and his vision for the future.

Congratulations to President Obama. You are inheriting huge problems but the nation is behind you as you make history today.

"What works, we will keep, what does not, we will shed" President Barak Obama