February 17, 2009
American Recovery and Reinvestment Act of 2009
A massive economic bill known as the American Recovery and Reinvestment Act of 2009 was officially signed into law by Pres. Barack Obama. The nearly 800 billion dollar bill will push the federal deficit to unimagined heights in order to put the brakes on America’s financial downturn.
The bill is considered by its detractors as a fiscal catastrophe, making future American generations responsible for paying the tab. Supporters of the measure say, without a substantial financial stimulus there really isn’t much of a financial future to look forward to.
The bill intends to focus heavily on funding infrastructure improvements nationwide in order to create jobs for a growing number of the country's unemployed. Unemployment skyrocketed in the months just prior to the bills signing, and approached 10% at the time.
In the weeks prior to the Bill’s passing, talks about a $15,000 first time homebuyer tax credit were circulating but its bid was dropped several days later. However, as part of the package, the bill would provide an $8000 tax credit to first-time homebuyers. Under the new stimulus, unlike the prior $7500 homebuyer tax credit, homebuyers are no longer required to repay any of the credit back.
The first time homebuyer tax credit program comes with income limitations. The bill also keeps in place increases in loan limits of FHA, Fannie Mae and Freddie Mac backed mortgages. Money is allocated to local municipalities in order to purchase and rehabilitate foreclosed homes. Staten Island only sees three homes purchased under the program.
February 25, 2009
The Federal Reserve begins to implement bank stress tests. The purpose of the stress test is to determine if the largest U.S. banking organizations have sufficient capital to withstand the impact of an economic environment worse than what was being projected at the time.
February 26, 2009
The FDIC reports that the number of banks in trouble has increased significantly, from 171 insured banking institutions to 252 .The FDIC also announced there were 25 insured bank failures in 2008.
February’s Staten Island real estate market
Staten Island sees a fourth straight month of sub-200 home sales, standing in at 158 sales of one and two family homes. The months of inventory numbers are still staggeringly high at nearly 19 months. However, this begins a slow turning point in a better direction for Staten Island's real estate market.