Call me a little strange, but I think the current reduction in prices is a wonderful way to introduce first time home-buyers back into the Housing Market. Having lived through 16% interest, housing price rises and falls, market gains and losses, lowest interest rates in modern history, and now the "adjustment". I see the possibility here for consumers to gain some weight in the housing market. As inventory rises, and prices decline, the consumers may feel more empowered and less starved as their ability to purchase property is fed by marcket changes. Sellers on the contrary have been slow to accept, the Buyer's Marketand reluctant to reduce prices in hopes of achieving what could be perceived as unrealistic profits given the current market conditions. In other words they are trimming the fat.
In Florida during a special session held on June 11-14, 2007, the Legislators passed a historic Tax Act. Property taxes will be rolled back to the 2006-2007 levels and an additional reduction (7% in Osceola County) will be seen in November when the tax bills are issued. On January 29, an referendum will be put before voters allowing them to either preserve their current Save Our Homes Property Tax Exemption which has a 3% annual cap or decide on the largest Property Tax cut in history. The proposed "Super Size Homestead Exemption", could in effect allow someone to purchase a mid range home, and enjoy the immediate benefits of homeownership under the new proposed guidelines. Cutting taxes for the average homeowner by 44%.
Also eliminated under this act are Personal Property Intangible Taxes which could save business owners money as well. Commercial and Industrial Owners would also benefit. Concerned senior citizens would be allowed to a minimum deduction of $50,000 or the super sized version of $100.000 tax exempt.
Given the poor performance of the Real Estate Market, many want to be homeowners were shut out when the market accelerated at a phenomenal rate between 2003-2005 in part triggered by the lack of available housing. With housing starts dropping significantly, and the current inventory of existing homes in the 6-8 month levels or higher, buyers have more choices in homes than they have previously enjoyed.
A couple earning a modest income, with a decent credit rating, can qualify for a home loan, and in some cases a first time buyers program. Lenders are working with many home market newcomers helping to posture them to properly prepare their loan applications to participate in the current Buyer's Market. Paying bills on time, not missing payments, and delay making other large purchases such as an expensive vacation or new car purchase could help posture want to be homeowners well in this changing market.
The new Property Tax allows for portability as well as immediate realization. Home Buyers would be able to take the significant reductions from the time they move in. As a Realtor, I see this as a good incentive to many would be Home Buyers who were waiting to see what they market would do.
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