Tax Credit Extension - Impact on Fresno, Clovis Real Estate

HAROLD PENNER: Fresno Real Estate Market Analysis
Tax Credit Extended!


The big real estate news this month is the extension of the federal tax credit for first-time home buyers from November 30, 2009 to April 30, 2010. A first time home buyer is defined as a buyer who has not owned a principal residence during the three-year period prior to the purchase.

Now even more interesting for many of my sellers/buyers is a new tax credit that was added for repeat buyers. Buyers who already own a home and have lived in the home for five consecutive years are eligible for up to a $6,500 tax credit on their next home purchase. Whether you are interested in moving up or downsizing from your current home, you qualify as long as the new home will be your future primary residence.

Click to Access More Information on Tax Credits

So, those are some incentives for buying, but the question I am often asked is whether now the right time to buy in Fresno and Clovis, California. Well, I prefer to let the numbers do the talking when it comes to answering that. There are certainly fewer choices of homes available today than a year ago. 5,010 homes were for sale in October 2008 in Fresno and Madera Counties. Today the number of active properties averages around 2,500. So, there are 50% fewer homes for sale today than a year ago. The primary reason for this is the reduction of foreclosures. The number of foreclosures for sale today have decreased by about by an astounding two-thirds since the beginning of the calendar year.

Many buyers may be waiting for those foreclosures to come back and flood the market with bargains thereby driving the overall price down. But, by looking at the statistics from this past year and by referencing the historical trends of the Fresno market, I don't anticipate any significant price drops. During the height of active foreclosures, the average selling price was $156,256 (January 2009). With 50% fewer homes to choose from the average pricing this year has inched up to $174,867 (October 2009).

Now, it's possible that if foreclosures returned with a vengeance, Fresno and Madera counties' prices would decrease. But, in the past year the demand for homes has also increased. First time home buyers have now seen prices that are affordable and within reach. Out of town investors have again returned to buy rental properties. The overall number of sales has been steadily increasing instead of decreasing.

So, in short, I am advising clients that with historically low loan rates, low prices and this newest tax credit extension this is truly an excellent time to buy.

OCTOBER MARKET STATISTICS* - Fresno and Madera Counties

• Average Price of Sold Homes in August '08 vs. '09 - $190,044 vs. $175,036 (8% Decrease)
  
• Sold Homes in August '08 vs. '09 -907 vs. 891 (2% Decrease)
  
• # of Foreclosures and Pre-Foreclosures Sold in August '08 vs. '09 - 595 vs. 577 (3% Decrease)
  
• Avg. Loan Percentage Rate in September 2009 - 4.83% (30 Year Fixed)
  
  *Unless otherwise indicated, all stats are based on residential sales in Fresno and Madera counties.

   

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