The Housing Market should see some positive results from the signing of the Housing and Economic Recovery Act of 2008 by President Bush. The benefits are for first time home buyers in the form of a home-buyer tax credit. First-time buyers are vital to the housing market because they start the domino effect. They also keep the market stable because of the demand vs. supply.
Buyers who haven't owned a property in the last three years can qualify for a tax credit up to $7,500 or 10 % of there home purchase price. To qualify homes can be purchased from April 9, 2008 till July 1, 2009. There are income limits and recapture taxes, so please check with your financial advisor.
The housing bill includes higher loan limits allowing Fannie Mae and Freddie Mac to increase loan limits based around median pricing, which means we will see the jumbo loan limits raised. The effect on the local market will be lower interest rates on loans higher than $417,000. WE should see some positive results in the higher end areas of Central Arkansas.
Using history as a guide, Lawrence Yun, chief economist of the National Association of Realtors believes the Housing Act could represent a boost of 10% in the number of homes sold.
In Central Arkansas we have seen a slight slow down in homes sold. With the new incentives for first time home buyers we expect to see increase sales.
See below for the trends in Pulaski County:(the numbers below are from CARMLS and are based on Jan. through July 31 numbers)
Year: TTL Listed # sold Avg. List $sold Avg DOM % Expired
2006 5403 3494 $171,558 58 .02%
2007 6385 3461 $177,974 76 15.72%
2008 5541 2798 $176,168 79 22.83%
Our local market is only slightly down from 06 and 07 numbers, but the inventory is adjusting and surprisingly prices have only seen a 1.1 % decrease. We still have approximately a 13 month supply of homes, however we are seeing much stronger markets in specific neighborhoods with only 5 months of supply.
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