All the talk among Realtor’s, Mortgage Brokers, Investor’s and first time home buyers is about whether or not the first time home buyer $8,000 tax credit will be extened past May 1, 2010. Everyone working in Real Estate has enjoyed the surge of sales this tax credit has provided during the past several months.
It appears certain that the $8,000 First Time Home Buyers tax credit will not be extended past May 1, 2010. Everyone is wondering what the impact will be while enjoying the final surge of people buying during this last week of April. Mortgage Brokers and Realtor’s are secretly asking one another what will happen next to the real estate market.
I am an investor and from my perspective we are still working right in the heart of the Perfect Storm caused by the glut of distressed properties on the market. Never before has there been such a transfer of real estate wealth caused by the greed of Wall Street. Today’s home buyers can purchase property as if shopping at Macy’s inventory reduction sale. Just like finding your favorite clothes marked down 30%, homes can readily be purchased at sharp discounts in most markets across America. I expect to continue to see some strong movement in the real estate market for the coming months due to the incredible deals that are readily available to home buyers.
The second reason I believe the market will stay strong for several months is the second condition of this perfect storm. Very low interest rates. With decent credit home buyers are still financing homes with interest rates in the low 5% range. In fact we have a closing on a home that was purchased from us scheduled to close may 7th and the borrower qualified for a rate of 4-1/8%. The very low interest rates will not last forever and the fact is they worth far more than the $8,000 tax credit, assuming the average American spends the $8,000 and does not re-invest it for a profit over the next 15 years.
The third reason I believe the market will stay strong for a while is the wide availability of grants. In Virginia where I live, and in many states across our nation there are many grants still available to first time home buyers. We recently sold another home in Virginia where the borrower qualified for a $10,000 grant. Again, that grant exceeds to return of the $8,000 tax credit.
The good news is that I believe homes will continue to sell for the next several months. The key to your sales is the same as always:
1. Property condition: There are a lot of homes still on the market; to make yours stand out from the others be sure it is 100% clean, clutter free and well maintained inside and outside. Be sure the outdoor space is appealing with a well cut lawn, mulched flower beds and trimmed bushes.
2. Marketing: The majority of home buyers begin their search on-line. Be sure that your home is marketed heavily on the internet. You should be sure to have your home listed onto the MLS either list it yourself with a great flat fee MLS listing service such as http://www.justlistem.com or find a strong realtor. Your home should be listed on craigslist, zillow and trulia along with the MLS. In addition to internet marketing and the MLS, be sure you have a property flyer along side a great for sale sign that is easily read when people are driving by your home.
3. Price: In this market you need to consider your listing price carefully. Take time to review the comparables of recent homes sold in your neighborhood, speak to a strong Realtor or simply have it appraised. You will want to price your home competetively and be sure to offer the new Buyer assistance with their closing costs to make it easy for them to purchase your home.
Sit back, relax and enjoy this perfect storm. There should continue to be strong sales for the next several months due to low interest rates, readily available grant funds and the continued great opportunities to buy.
What do you think the impact of no longer having the $8,000 first time home buyers tax rebate will be? Leave me your opinions in the comments. I would love to know your thoughts.