With low interest rates and current market prices, first time home buyers are definitely interested in the thought of owning their own homes. Earlier in March, Century 21 Real Estate LLC sponsored a survey of 1000 potential first time home buyers; 78% of those surveyed agreed right now is a good time to purchase a home, even when taking into consideration relevant concern about the economy.
46% of those surveyed, however, are extremely concerned about having enough for a down payment. 75% of the people surveyed are under the impression it’s hard to get a home loan right now.
Finding a real estate agent to work with will also give first time home buyers an edge in learning how to make a home purchase happen for them. Having a savvy, educated professional on their team opens up a wealth of important information for new home buyers. Agents know about neighborhoods. Real estate agents understand intimately the paperwork involved in home purchases and they are well versed on market conditions. Plus, agents are involved in professional networks, which can help new home buyers receive references for vendors of services they’ll need to complete a home purchase.
Purchasing a new home can be an attainable goal for first time home buyers. If you’ve been mulling over a new home purchase and would like to start doing your homework, come check out Diane Rae Jones’ and Donna Cowles’ free, weekly buyer seminar. It’s held at the Windermere Mercer Island office Monday evenings, starting at 6 pm. A rotating panel of industry experts volunteer their time to participate with you during the seminar: a CPA, a professional home inspector and a Certified Mortgage Consultant. Pre-registration is requested and seminar materials can be personalized for you, if you share what you’d like to learn in the seminar when you register.
First, there is the $8000 tax credit for first time buyers completing a purchase by 12/1/2009. This is not a deduction, but a full credit against taxes owed. The definition of “first-time home buyer” includes someone who has not owned a home in three years.
In addition, and less well-known, there is state and local government bond money available to help first time buyers with down payments. These programs include those sponsored by most local metropolitan cities, some are for rural King County and some are for targeted groups like teachers and other school/college employees and veterans. Down payment assistance amounts vary, but can be as much as $60,000. Some do not require repayment for 30 years and they accrue at simple interest. It is also possible to “layer” programs: participation in one does not disqualify someone from another program.
But, wait, there’s more. Some bond money programs can be used by people who are not first-time buyers, but have other special situations.
The tax credit and bond money programs, combined with today’s very low interest rates and lower purchase prices make this an amazing time to buy a starter home.
So, if you know someone who wants to buy a home, but thinks they can’t afford it, please send them to my weekly, free buyer seminars at Windermere Mercer Island by giving them this link: http://www.WeHelpYouBuyAHome.com
Attached are the latest numbers for Mercer Island. The bright spot is that pending sales are up 300% from January and the market is showing signs of life. Active listings have increased significantly as well bringing total inventory up to 174 homes for sale. Average Days on Market (DOM) are up over 40% from January as a result of increased this inventory.
Moderately priced homes finally get their day in the light! They represented 2/3 of the homes sold on Mercer Island in February. You will note that Median and Average Sales Prices are both down sharply—weighted by increased sales activity of those moderately priced properties more so than of a widespread dramatic reduction of prices. Just 4 of the 12 sales had list prices above 1.1 million even though that segment represents nearly 60% of all homes for sale on the Island.
Here are the details on yesterday’s announcement by the US Treasury Department on two new programs to make refinances and loan modifications easier to obtain. The Home Affordable Refinance program is available to owner-occupied homeowners who are current on their loans and have documentable income to support their payment. It allows them to refinance into a lower rate without needing 20% equity. The Home Affordable Modification program is for owner-occupied homeowners who are at-risk of foreclosure. It allows reduces the homeowner’s monthly payment to no more than 31% of their gross monthly income through interest rate, loan term extensions of principal forbearance. You can find more information in the attached summary or at the US Treasury’s new website: www.financialstability.gov/
The Homebuyer Tax Credit is part of the $780 billion “American Recovery and Reinvestment Act of 2009” the President signed into law on February 17, 2009. It provides for an $8,000 tax credit that would be available to first-time home buyers for the purchase of a principal residence on or after January 1, 2009 and before December 1, 2009. Unlike the previously approved $7,500 credit for 2008, the 2009 credit does not require repayment. First-time home buyers purchasing a principal residence prior to December 1, 2009 will be able to claim the credit on a tax return to reduce their income tax liability. If any credit amount remains unused, then the unused amount will be refunded as a check to the purchaser.
The National Association of Realtors estimates that the first-time home buyer credit, along with increased conventional conforming and FHA loan limits, will create an additional 900,000 home sales in 2009. This stimulus is aimed at helping reduce the oversupply of homes on the market and to create the estimated 3% in ancillary purchases that typically occur when a buyer purchases a new home. Details of the new credit are available at NAR’s website.