Everywhere we go, we are asked "How is the housing market?" This is actually one of our favorite questions to answer!
First off, we truly believe that a local real estate agent is your best source of housing information, rather than the national news. Our market here in Maryland differs greatly from other markets nationally -- We are protected in many ways with having the federal government so close, our highly sought-after school system, and Maryland's growing advancements in the technology fields which, in-turn, creates more job opportunities.
The housing statistics for September showed steady growth in houses SOLD compared to last year. State-wide, the growth in the # of units SOLD was 9.6% more than in 2008 with the average price of homes falling just 9.5% lower than last year.
Locally, the housing market is growing stronger each day and consumer confidence in homeownership is as well. This can be attributed to both the very low interest rates (5% as of the entry of this blog) as well as the government's Stimulus Plan which gave 1st time homebuyers a tax credit of up to $8000.
Although there are still a lot of foreclosures & short sales on the market (short sales occur when the Seller owes more on the property than what they can sell it for), we are still seeing homes selling within the 10-45 day time frame --- As long as Sellers are realistic about their asking price and listen to us when it comes to preparing their home to sell.
So, the housing market is improving and we are hopeful that with the extension of the 1st time homebuyer tax credit and the creation of a tax credit available to the "move-up" Buyer, that it will continue to be strong into 2010.
As always, call us or email us ANY TIME you have a real estate question, homeownership question or just want to say "Hi!" We are your Real Estate Resource!
The affordability of home buying has soared as home prices have fallen and mortgage rates are still holding at historical low's. (As of the writing of this blog, the average 30-year fixed interest rate was around 5.5%). Consumer's views of homebuying conditions have strengthened, thanks to the government's stimulus plan, "stimulating" the 1st time homebuyer market, which had fallen flat in the last year. Many 1st time homebuyers have come out to take advantage of not only the low interest rates but the $8000 federal tax credit as well.
Tighter lending standards & appraisal changes continue to be an issue which only affirms the necessity of using well-experienced lenders and real estate agents (like us!).
For those of you who are wondering what the new Stimulus Package represents for Homebuyers, here is a comparison chart of the old tax credit versus the new tax credit:
FIRST-TIME HOMEBUYER TAX CREDIT
As Modified in the American Recovery and Reinvestment Act
Major Modifications Shaded
February 2009
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FEATURE
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CREDIT AS CREATED JULY 2008
APPLIES TO ALL QUALIFIED PURCHASES ON OR AFTER |
REVISED CREDIT –
EFFECTIVE FOR PURCHASES ON OR AFTER |
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Amount of Credit
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Lesser of 10 percent of cost of home or $7500
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Maximum credit amount increased to $8000
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Eligible Property
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Any single family residence (including condos, co-ops, townhouses) that will be used as a principal residence.
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No change
All principal residences eligible.
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Refundable
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Yes. Reduces (or can eliminate) income tax liability for the year of purchase. Any unused amount of tax credit refunded to purchaser.
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No change
Purchasers will continue to receive refund for unused amount when tax return is filed.
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Income Limit
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Yes. Full amount of credit available for individuals with adjusted gross income of no more than $75,000 ($150,000 on a joint return). Phases out above those caps ($95,000 and $170,000).
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No change
Same income limits continue to apply.
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First-time Homebuyer Only
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Yes. Purchaser (and purchaser’s spouse) may not have owned a principal residence in 3 years previous to purchase.
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No change
Still available for first-time purchasers only. Three-year rule continues to apply.
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Revenue Bond Financing
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No credit allowed if home financed with state/local bond funding.
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Purchasers who utilize revenue bond financing can use credit.
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Repayment
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Yes. Portion (6.67% of credit or $500) to be repaid each year for 15 years, starting with 2010 tax filing.
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No repayment for purchases on or after |
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Recapture
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If home sold before 15-year repayment period ends, then outstanding balance of repayment amount recaptured on sale.
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If home is sold within three years of purchase, entire amount of credit is recaptured on sale. Applies only to homes purchased in 2009.
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Termination
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(But note program changes for 2009)
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Effective Date
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Purchases on or after |
All revisions are effective as of |
As always, call us if you'd like to start looking for a home this year!
Do you know anyone who would benefit from a $7500.00 First Time Homebuyer Tax Credit? Any first time buyer who purchases a home between April 9, 2008 and June 30, 2009 is eligible to receive up to a $7500.00 tax credit, NOT a tax deduction.** (For this tax credit, a first time homebuyer is defined as anyone who has not owned a home in the last 3 years). This credit is actually a 0% interest rate loan from the government that is paid back over 15 years at $500.00 per year.
**There are income limitations and circumstances where the credit does not have to be paid back. Call us for details!
Many people are feeling a sense of doom and gloom over the current real estate market. However, this is not the first time that home prices have adjusted. In fact many times the housing market has taken different turns historically. Here are some quotes from periodicals that should make you smile:
"The prices of houses seems to have reached a plateau, and there is reasonable expectancy that prices will decline." Time Magazine, December 1, 1947
"The goal of owning a home seems to be getting beyond the reach of more and more Americans. The typical new house today costs $28,000." Business week, September 4, 1969
"Most economists agree. . . .(a home) will become little more than a roof and a tax deduction, certainly not the lucrative investment it was through the 1980’s." Money, 1986
"Financial planners agree that houses will continue to be a poor investment." Kiplinger’s Personal Finance. November, 1993
The thing to remember is that you alone can determine how long you are going to live in a house. If you think you will be in one place for many years, the odds are that you are making a good investment. Housing markets rise and decline over the years. Our team sold a 3 bedroom home in 2003 for $350,000. The seller had bought that home with her husband for $7,200 in 1947. She had raised two daughters there and had actually paid off the home in 1977. From 1977 until 2003 she lived there mortgage-free. When she and her husband bought the home in 1947, both of their parents told them they had made the most foolish mistake of their lives. You decide.
How do you start the process of looking for a home? Years ago, buyers went up and down streets writing the addresses of homes they thought they might like to see. This process was tedious and often times when the buyer got inside the house, it was far from what they thought they were going to see. All in all, the process was a waste of time for all involved.
Today there are ways to make looking for homes more effective. Your REALTOR® has the ability to email you listings with "Virtual Tours" on them. This will give a buyer even more information on a home. The agent can also send the buyer the price of the home (so no one looks at a home they cannot afford), specifics on the home (how many bedrooms, how many baths, etc.) and pictures of the inside of the home. So if a buyer is looking for a home with neutral décor and the house has red wallpaper in one room and pink wallpaper in another, a buyer can look for himself or herself to determine if they can live with the décor. We make sure you have seen the virtual tour of a home before you look. And if a home does not have a virtual tour, you could be surprised when you see it.
Nothing takes the place of looking in person, but you can start your search with the help of a licensed professional to make a more educated guess at which homes you would like to see in person. The Dynamite Team is here for you!
Are sellers in denial? The hardest part about selling a home is that some sellers may be in denial or even worse, listening to their neighbors about the market. So many times we go to list a home and a seller has incorrect information about the price that a home in their neighborhood sold for. What people won’t tell you about their own house are the concessions (closing costs) they had to make to a buyer.
A house is more than a commodity—it is a home. Sellers can separate their ego, sometimes, from conditions in the market that exist at the present time. Sellers don’t want to admit that the roof they replaced or the paint on the front door are nothing more than deferred maintenance. Houses must look their best, especially in this market, when they are going to be sold.
The best way to remove yourself from the emotionalism of selling your home and into making a smart business decision is to find a REALTOR® who not only knows the market, but can tell you what you really need to do to make your house sold. A top notch professional will come to your home “armed and dangerous” with information about your neighborhood and all the things you can do to make your home sell.
The Dynamite Team fits the bill. We come in with prices, strategies and staging for your house to make it the most marketable home amongst the competition.
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