Tax Credit Nearing the End...

Home buyers will no longer be able to take advantage of that tax break if they have not entered into a contract before Saturday, May 1st, 2010. In the past several months many buyers have been able to purchase a home and receive a tax incentive for doing so. Now the time for the tax incentive is nearing an end. There is no word of an extension and it seems unlikely that there will be one either. Those that do enter into a contract before the May 1st deadline will then have to the end of June to close.

We have seen a surge in buyers the past few weeks for this and other reason. Several agents in our office have had buyers rushing in. While many are now under contracts, there are still some that are not. One client called this last Monday stating he really wants to take advantage of the tax break before it's to late. Many agents are starting to find themselves rushing around showing homes to these desperate buyers.

While the tax credit ends the end of April, the mood is still positive. Most professionals agree that buyers will still continue to purchase homes due to the great buys and the still low interest rates that can be picked up right now. Tax credit or no tax credit, this year is looking like a positive one for real estate. A welcome change from the past couple years where values had continued to decrease.

Government Gives Extention of Tax Housing Credit

Near the end of November, the first time home buyer tax incentive/credit was extended to April 30th 2010. For first time home buyers, this means that if you have a contract written up and turned in by April 30th, you will get to take advantage of the $8000 tax credit. Also the credit of $6500 has been extended to second time home buyers that have lived in their homes for 5 or more years.

Here are a couple items to keep in mind when trying to take advantage of this credit. For first time home buyers, you cannot have owned a home within the past 3 years. Second, you will need to have your home mutually accepted by the 30th of April. Third, you need to close by the end of June 2010.

Another change raises the income limit from $75,000 for an individual to $125,000 and from $125,000 to $225,000 for a couple. The credit is still available on a reduction basis for those who make above these limits.

Most of our industry agrees that during the holidays we will see a slight slowdown. However, at the turn of the year there is growing anticipation of an increasing flow of buyers as they work to take advantage of the extended tax credit. It is also the general impression that come January, we will likely start to see a recovery in most areas here in Western Washington.

Current Trends in our Market...

Over the past couple months the real estate market in the Seattle area has continued to see a stabilized pricing on homes while experiencing a gradual decline in homes on the market. First time buyers continue to race against the clock, trying to take advantage of the Government Tax Incentive for the first time buyer. Currently the government $8000 tax credit is set to expire on December 1st, 2009. Signs continue to reflect that we may have reached the bottom of the real estate market.

While this is a deep sigh of relief for almost everyone, there is still some unknowns that could affect different pockets of the market. Depending on what happens with Boeing, for example, areas around Everett could soon be dealing with an influx of homes coming onto the market from employees having to transfer. So sorry, no crystal ball here.

Still though, despite all the hustle with buyers, Sellers are still typically seeing 60 - 90 day market times for homes under the 350,000 price point. Higher priced homes are generally seeing a little longer market time due to the smaller number of second time home buyers in our market today. They are still out there, but most of them have to sell a home first before they can buy their next home.

Bottom line the next two months will continue to stay busy, especially for the first time home buyers. While rumors of an extension to the Governments Tax Incentive loom about most buyers do not seem to want the risk by waiting till later to buy.

- Bryan Lovell

Interest rates cause buyers to take action.

Interest rates have been below 5% for the past several weeks. Many buyers in the market felt they were in a safe position with the struggling economy believing that rates would remain about the same for some time. Over the past week however that has not proven to be the case. Buyers are noticing their opportunity for an incredible interest rate starting to fade as the summer begins to come on full force.

Just in the past week, three buyers that I have been working with all decided it was time to secure a home before the rates spiked further. Disappointment gloomed about them as running the numbers started to show just how much more they would be paying for the same home verses just 2 weeks ago. Realizing that the rates were likely not to improve however, buyers seem to be making a move before rates climb even higher.

This is an incredible market right now, with the credit for taxes this year, the selection of homes, as well as how much prices have come down make this a prime opportunity for any first time home buyer that is ready to buy. It doesn't get much better than this. Often times in history there have perhaps been times where there have been less buyers than today BUT to have a combination of few buyers and incredible interest rates make this one of the best opportunities.

Back in the 80's Interest rates loomed around the upper teens! it was not uncommon for a buyer to pay 18% in interest. Compare that to the average interest rate of 7 or 8% and you realize just how pricing interest was. Take another look at our low rates today of 5.5% and you will realize that while the rates are on the rise, we still stand in an incredible market for low interest rates. Buyers are realizing that these low rates can not last forever and with the sudden rise in interest, buyers are seriously making there moves today.

Multiple Offers on Bargain Homes

Over the past 6 months, buyers have been able to make offers on just about everything without worry of having to compete against other buyers. During the month of April that has not been the case. Several buyers have decided to pick up the pen and start pursuing the ever decreasing bargain price range. Just two weeks ago I had writhen up 3 offers on different homes across Snohomish County. Every single one of them had at least one other buyer making offers, causing the sales price to increase over the asking price.

Last week again two offers we also written with other offers on the table. Gratefully my clients got those homes. We are seeing these bargain price homes selling off. Over the next couple weeks we will see the low priced homes start to drop off.

If this trend continues, homes will stable in price and likely start to earn back their value again. If you do happen to know someone who is sitting on the fence, this is the time to get serious. In six months that friend may be wishing they acted sooner than later.

What is happening in the Real Estate Market?

Over the past year our market has seen a decline in our real estate market. However, we continue to see signs now that we have entered into a recovery period. Just 2 months ago, if there was a home on the market and you had an interest in it, you likely would be the only one making an offer at that time.

Today, that is not the case. Just within the past month, we have seen a surge of buyers entering into the real estate market. Investors are actively trying to take advantage of the low prices and incredible interest rates. Financial markets have loosened up some and people are able to qualified again. Just last week, two transactions I am working with both received multiple offers of which pushed up the prices offered. In both cases, both of the prices ended up being higher then the actual asking price.

Other agents within the CENTURY 21 North Homes are also experiencing the same trend. Buyers are noticing this too. A synergy seem to have boosted buyers into taking action as our market starts to enter into an improving market.

Our market is seeing an increase of offers as well as a gradual decrease in our housing inventory. This is very good news for both Buyers and Sellers but also for our economy. For buyers it is a sign we have reached the bottom. If there is a time to buy, and you can, this is your window of opportunity. For Sellers, it seems we have seen the bottom and now the values of our homes will start an upward trend once again.

Should you be looking to buy or sell a home, contact one of our agents and we will be glad to share with you how the market is reacting to your specific area.

Classes Provided for Distressed Homeowners

Over the past year and a half, our nation has watched tens of thousands of people forced out of their homes. This happens mostly because of the homeowner’s inability to make or catch up on their mortgage payments. I have personally visited with several of these homeowners who only wish there was a way to keep their home. The problem is they have gotten themselves into a loan where the interest rate is consuming their ability to make payments. In some cases they are even making the same amount as they were when they bought the house but the Adjustable Arm increased their payments to a point that they could no longer keep up.

To many this sounds all too familiar. After talking to many homeowners who have been in similar situations we have discovered most just don’t know what to do. Many homeowners just simply give up believing there is no way to keep their homes. They then pack up and move, the put their keys in an envelope and mail it into the lender believing that was all they could do. What is really interesting is that most homeowners never even contacted their lenders to see if they have other options. Some of these people very likely could keep their homes if they only understood the options available.

It is for this reason that Century 21 North Homes Realty, Inc. is reaching out to those who find themselves at risk of losing their homes. Our offices are holding classes each month at no expense to these homeowners. Classes have been customized to help you the homeowner knows just what options you have to helping you keep your home. It is our goal in helping these homeowners, to keep the real estate inventory down, helping those who have to sell, and avoid many of the scams taking advantage of financial situation. On top of all this, for those who need additional assistance there is also advanced service that CENTURY 21 North Homes Realty, Inc. has available.

Should you find yourself in this situation then come attend one of our special classes. All you need to do is call our office at (425)743-3330 and get yourself registered on our class schedule. Then come and attend.