This past week, President Obama signed an extension and expansion of the first-time home buyers tax credit. The $8,000 credit was schedule to end on December 1, 2009 but will now be in effect through the end of June 2010. Home buyers must be under the sales contract by April 30, 2010 and the transaction must close by June 30, 2010. The income limitations were also raised. Single buyers can now earn up to $125,000 and still get the full credit while a married couple can earn $225,000.

The bill also made more homeowners eligible to claim teh credit on their taxes. First-time buyers - those who have not owned a home in the past three years - still qualify for an $8,000 rebate. But now people who want to trade up can also qualify. Those who have owned and occupied a residence for at least five years out of the past 8 can claim a $6500 tax credit if they close on a purchase by the end of June 2010.

This new benefit is a significant step into the continued recovery of the Real Estate market. The "shot in the arm" injection of first-time home buyers from the original tax credit was apparently successful based on the sharp increase in home sales throughout the united states. Although the National Association of Realtors reported a decline of over 11% in the medium home price over last year, the sales in some markets, like Lee County Florida, are up significantly this year. To give you you an idea of the fire sale occuring here - in 2005 which is the boom and highest peak in single family home sales in Lee County Florida, there were 9,842 homes sold that year. Just through August 2009 there has already been 11,178 homes sold, blowing away the highest level ever in Lee County.

So go ahead and ask, how is the market doing? It is booming. 

Research has revealed that the housing market appears to be on the fringe of emerging from the worst real estate market in several years. There are several refreshing trends that substantiate this hypothesis.

There has been an influx of sales activity reported in many counties in the past three months which stems from tax incentives for first time home buyers, investors strategically buying income properties and buyers with good credit getting financed.

Great buys at reduced prices makes some markets a target for desired properties that otherwise would have been out of some buyers budgets. With some short sales and foreclosures netting a 30% reduction of the previous purchase price, many buyers are taking action and making offers.

In some markets the time a property is on the market is decreasing substantially. In some instances properties that are not foreclosures or short sales are getting offers within 30 – 60 days, where 9 months ago the average may have been 90 – 120 days.

The other bright spot on today’s housing market is the multiple offer situations that some buyers are facing when they are putting in offers on distressed properties or properties with built in equity. In some instances, there are multiple offers on foreclosures within a week of being put on the market.

For some short sale properties we are seeing prices go back up from the original listing price because banks have refused substantially lower offers and these properties are more in line with other properties on sale in the market. Price increases in the MLS is now a daily occurrence as the market begins it slow shift back up.

The first time home buyer $ 8,000 tax credit is being used by many Real Estate Agents as marketing tools for first time home buyers and they are being severely successful at doing this. First time home buyers are able to afford properties that were out of their budgets three years ago and they have a significant incentive to purchase it today, especially when they can use the credit to pay for some of the needed repairs.

Some investors are finally able to get into higher end properties like beach front rentals or golf course rentals that were previously out of their budgets. These investors are typically paying with other investment money and a vast majority of the deals are paid for with cash.

Another stimulus to the housing market is record low mortgage interest rates which are being taken advantage of by buyers with good credit. These interest rates are also making it more affordable for buyers to purchase homes that three years ago were both priced out of their budget and the interest rates made the payments unaffordable even with a substantial down payment.

Nationally, existing home sales in April increased 2.9% over March, according to the National Association of Realtors. Additionally since January 2009, the medium home prices are up 3.17% through April 2009.

I predict that we will continue to see sales increase month over month by 3% – 5% and the medium home prices will continue to go up at a rate of ½ of a percent per month throughout the remainder of 2009. The medium home price took a hit with the many foreclosures and short sales that have taken place. As this distressed inventory continues to be bought and we sell through these homes, the medium home price will continue to go up. Many economist state that the real estate market is a leading indicator of the total overall economic health while unemployment rates are a lagging indicator. When we start to see the unemployment rate start to disintegrate, the real estate market will be well on it’s way to recovery with steady continued growth.