New Orleans Real Estate – Economic Stimulus Package

How Bush’s new economic stimulus package effects New Orleans Real Estate

Yesterday, President Bush signed a $168 billion economic stimulus package into law. That is a ton of money but will it have any real effects on our economy? Let’s first start with the details:

• Tax rebates of $600 to individuals who make $75,000 or less, and $1,200 to couples who make $150,000 or less. After those income limits, recipients get 5 percent of however much their income exceeds the limit.

• Tax rebates of $300 for individuals and $600 for couples who make at least $3,000 from income and Social Security benefits.

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• Each child in a household gets an extra $300 in the rebate.

• The limits on the size of mortgage loans that can be insured by Fannie Mae and Freddie Mac will be increased from $417,000 to up to $729,750 depending on the median price of the area.

• The first-year depreciation of capital equipment purchased in 2008 is increased from 20 percent of the purchase price to 50 percent.

• Small businesses get a boost in the form of bigger tax write-offs they can make on equipment purchased in 2008. The deduction will be increased from $125,000 to $250,000, and businesses with up to $800,000 in revenue are eligible, replacing the old $500,000.

Sounds great, doesn’t it? But how does it effect people in New Orleans? Well, according to Nola.com, throughout Louisiana around 1.9 million people can expect around $1.6 billion in rebate checks. That is a lot of money that can be spent around the state. However, a recent poll by the Associated Press-Ipsos suggests that only one in five people plan to spend their newfound wealth. Most people plan to pay bills with the money. Even so, it is still a nice shot in the arm for our local economy and even if people payoff bills, their financial picture changes for the better. Granted not much of a difference, but positive nonetheless.

I think New Orleans real estate will be most effected by the last three bullets above. The Freddie Mac and Fannie Mae insurable loans increase is huge considering how many New Orleans properties sell for over the previous limit of $417,000. New Orleans residents buying real estate (up to $729,750) will not be forced to obtain a jumbo loan with higher interest rates. The last two bullets help out small businesses and we all know that small business is the fabric of the New Orleans economy.

I still remain bullish on the outlook for New Orleans and hope that this economic stimulus package will help. Not everyone believes it will have an effect but I certainly hope it will help us avoid a recession!

Read Also: Myth: Mortage Interest Rates will Plummet in 2008

Read Also: Are We Heading into a Recession?

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This New Orleans real estate economic stimulus package post was provided by Darryl Glade, Realtor with RE/MAX N.O. Properties. Darryl can be reached at darrylglade@remax.net or by phone at 504.451.8960. Darryl’s office is conveniently located in Uptown New Orleans at 8001 Maple Street. Darryl works throughout the Greater New Orleans area including Uptown, Lakeview, Broadmoor, Mid-City, Metairie, Kenner, Westbank, French Quarter, and the Warehouse District.

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