Nowadays I can look buyers straight in the eyes and whole-heartedly tell them that it really is the best time to purchase a home here in a very long time. If you are considering purchasing a home in San Francisco or the SF Bay Area, or if you are simply curious to hear my thoughts, please feel free to follow my five-part blog, which I will post over the next few weeks covering the following topics: Tax Credits; Financing; Other Buyer Incentives; The SF Market; and The Home Buying Process.
General Market Overview:
• Over the past month, sales in San Francisco definitely picked up; however, the good news for buyers is that it is still a Buyer's market & the deals are still out there!
Affordability in San Francisco has gone up due to the fact that supply is high and the demand is on the lower side (by default; due to difficulties folks are having in obtaining loans, unemployment, etc); this has driven the prices down, among other things. If you can afford to buy right now & have the resume to obtain a loan, you are golden!
Tax Credits that you should be aware of:
• There is tons of new construction in San Francisco and California that developers need to move! California came out with a $10k new home tax credit for those purchasing a primary residence in CA. The home needs to have never been occupied by a previous owner or tenant. There are no income limits on this credit; however, you must close escrow on your home by 2/28/10 in order to be eligible & you must stay in the home for at least 2 years. The $100M allocation for this credit has almost run out, so hurry up and get your $10k tax credit while it's still available!
• A federal tax credit of $8,000 is being offered to first-time homebuyers of primary residences (buyers who have not owned a home in the past 3 years). In order to be eligible for this a credit, one must make less than $95,000 per year. If you make between $75,001 and $95,000, you will be eligible for a credit, but not the full $8,000. You must close escrow on your home by 11/30/09 in order to be eligible & you must stay in the home for 3 years.
• If you are eligible for both tax credits, you may by all means take $18k in total tax credits for the purchase of your home!
• If you are taking out an FHA loan, this $8k federal tax credit can be used for your down payment. You must come up with 3.5% down yourself (or via a down payment assistance program, gift funds from family, etc.); so, this $8k credit can be used on top of the 3.5%
• FYI - Currently state legislators are going back and forth trying to extend the $100M allocation for the $10k California State New Home tax credit to be extended to $300M. A bill was also recently introduced that the Federal $8k tax credit may be expanded to a $15k per eligible home and, with this bill; the income caps ($75k to $95k) may be lifted. Fingers crossed! No guarantees, but this would be good news if it passed.
Bottom line-get these tax credits while they are hot and available! This is a short window and, if you have any remote interest in buying, you should start exploring the process now before it's too late and the window closes!
Stay tuned for Part II - Financing...