While we cannot say if this is the right time for you, we can say that many buyers are deciding the time is now.  The year to date sales numbers reveal that residential home closed sales are up 41% for January/February over the same period in 2008.  There have been 1268 closed sales vs 899 in 2008.  What is driving these numbers?  For one, the significant drop in the median home price. Homes and condos are available at prices not seen since the early 2000's.  Also, buyers are also snapping up deeply discounted short sale and bank owned properties. Many of these buyers are taking advantage of this market to buy their first home and their belief is these prices may never be this low again.  Others are investors willing to fix up neglected and abandoned homes which will make excellent rentals.  Either way, if you are considering purchasing a home, the timing is excellent with loans available to qualified buyers and a huge inventory of properties to choose from. 

Call us if we can help!

Home prices are one factor in determining your cost of ownership, but so are interest rates and financing availability.  Even though interest rates have gone up in the last six months, they are still near historic lows.  Since your monthly mortgage payment is a combination of paying down your principal and paying the interest owed, if home prices come down a little further but interest rates go up, it could cost you even more to service a mortgage on an identical home!

While a home is a major investment, it is also the center of your personal life.  It’s important to live in a home that reflects your taste and values, yet is within your financial “comfort zone.”  To that end, it may be more important to lock in today’s relatively low interest rates and low home prices, rather than to hope for a further break in prices in the future.

Please give me a call if I can be of any assistance in determining how much home you can afford in today’s market.

If you have not owned a home in three years, you qualify as a first time home buyer.  If you buy a home after April 9, 2008 and before July 1, 2009, you qualify for this credit.  Call your friends who just bought a home since April 9th and tell them they may take $7,500 off their tax bill if they qualify.  It has to be your principal residence, so rentals do not count.

The tax credit is 10% of the cost of the home, up to a maximum of $7,500. This is not an additional deduction that lowers the amount of income to be taxed, it is a tax credit.  In other words, you take $7,500 off your tax bill.  But there is a catch; the credit you receive now is actually an interest-free loan that must be repaid.

The loan has no interest, and will be paid back over 15 years.  You get the credit on your 2008 taxes, but you start paying it back on your 2010 taxes that are due in 2011, so you get at least two years without a payment.  You pay back 6.67% of the credit each year, so for a $7,500 credit the payment is $502.50 per year.  If you stay put for 15 years, you pay it off with no interest.

What happens if you sell the house?  You pay the balance back at the closing.  So, you get $7,500 now, and pay the rest of it back if you make money on the sale of your house.  What happens if you do not make enough money when you sell your house?  They forgive the rest of the debt. 

Other restrictions stipulate that you have to buy your first house in three years before July 1, 2009, not have super high income, not use bond financing and buy anywhere in the US.

If you’d like to learn more about this program, please call me!