Buyers shouldn’t wait on falling prices

We keep hearing here in Sarasota that a particular buyer wants to wait because they are convinced the market has further to fall.  Well if the law of supply and demand holds true that MAY not really be the case for OUR area. MLS inventory levels are substantially lower now than they were six months ago. But the REALLY interesting this I found in the article reprinted below is the statistic that if interest rates go up just one point (and all indications are that we ARE at a market LOW for rates) your payment will be the SAME even if the acquisition price dropped by TEN PERCENT from today's pricing.

If you also factored in the current tax advantage for first time homebuyers as an example, that will expire in just a few months sitting on the fence or trying to "time the market" could in fact be a very bad move!

From Florida Association of Realtors:

NEW YORK – Aug. 5, 2009 – Fear of overpaying for property is common these days, especially in places where prices continue to be unstable. If you encounter potential buyers afraid to commit based on a fear that they’ll pay too much, point out these factors:

• Waiting for the right time can be expensive. Some buyers would have more equity today, despite falling prices, if they had bought when they first considered it instead of continuing to pay rent.
• Financing is fickle. Some people who were highly qualified last year can’t find financing this year because the credit market has tightened or their personal financial situation now makes them an undesirable borrower.
• Interest rates are headed up. If prices decline by another 10 percent but interest rates increase by 1 percentage point, the monthly payment will be the same.

Source: The Wall Street Journal, Douglas Heddings (07/27/2009)

 © Copyright 2009 INFORMATION, INC. Bethesda, MD (301) 215-4688

- Mike W.

The IRS Wants ON to your IPOD to Illustrate the First Time Homebuyer's Credit!

On a recent visit to the IRS's Website I was surprised to find both English and Spanish Ipod Podcasts to help taxpayers understand the benefit of the current (and SOON to expire if not extended) $8000 First Time Home Buyer's credit. I will paste the link below but be sure to look in the upper right hand corner of the page that loads for the links to the Podcast.

Also note that if you work with certain lenders in Florida there may even be the ability to use the $8000 toward closing costs/downpayment. I'll put a link to the Florida Housing Finance Corporation to see if your favorite lender is participating!

Ahh the IRS on my IPOD - is this a great country or what?

Link to the Podcast and other info from IRS:
http://www.irs.gov/newsroom/article/0,,id=205416,00.html

“The new credit can get money in the pockets of first-time homebuyers quickly,” said IRS Commissioner Doug Shulman. “For people who recently purchased a home or are considering buying in the next few months, there are several different ways that they can get this tax credit even if they’ve already filed their tax return.”

First-time homebuyers represent a significant portion of existing single-family home sales. The expansion in the first-time homebuyer credit will make it easier for first-time homebuyers to enter the housing market this year.

Under the American Recovery and Reinvestment Act of 2009, qualifying taxpayers who purchase a home before Dec. 1 receive up to $8,000, or $4,000 for married individuals filing separately. People can claim the credit either on their 2008 tax returns due April 15 or on their 2009 tax returns next year.

Link to Florida Housing Finance Corp's Lender Pages:

http://www.floridahousing.org/Home/HousingPartners/LenderPage/
 

Keep in mind that at least for now - these transactions MUST CLOSE by 12/1/2009 to qualify so given how long it is now taking to get financing in place and to work out issues with lenders on short sales and foreclosures - time is of the essance.

Mike W.