The perfect Storm for Home Buyers

By
Real Estate Agent with Goedert Real Estate

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I'm sure, like me you are anxiously waiting for this extremely long, cold, snowy winter to come to an end. The good news is along with upcoming warmer weather, we find ourselves facing what may be looked back on as the best year ever to be a home buyer.  Here are some of the facts we are looking at...

1) Interest rates are at their lowest in nearly 40 years, buyers have been finding rates as low as 4.75%, this creates a terrific savings per month on mortgage payments.  If that home of your dreams was just a little out of your comfort zone, with the lower payment you might find you can get that house and still be paying less.  It's a good time to talk to your lender, find out what your current pre-approval would be and perhaps adjust your search criteria. 

2) Home prices are also jaw-droppingly low.  As Realtors we are amazed daily as we pull up the new listings and see some of the prices that are attached to really great homes.  These are generally foreclosures, the banks don't want to hold on to them and hence they price them more and more competitively.  These homes range from fixer-uppers for the handy person, to almost new, lovely properties that you can move right in and enjoy.

3) Our government has recognized the devastating effect of the massive numbers of homes in foreclosure and they are focused on putting an end to this epidemic.  Looking at every way possible to keep Americans in their homes.  We all hope that they are successful in their efforts and if they are, home prices will stabilize and we will see an end to the decline in pricing that has been the direct result of regular sellers being forced to compete with foreclosed home pricing.  When can we expect the bottom?  No one knows for sure until looking backwards, but right now you can still jump in before that moment has passed.

4) Eligible first time home buyers can now claim up to $7,500 as a tax credit which, while it must be paid back, is a zero interest loan.  That money can be used to pay off high interest credit cards, make the repairs on a fixer-upper home, you can pay down your mortgage, whatever your needs are, its up to you how that money can best be used.  This credit is only good on homes purchased before July 1, 2009 it's a limited time offer, another reason now is the time to buy. Go to http://www.irs.gov/newsroom/article/0,,id=186831,00.html to learn more about it.

It seems like we are entering what can be compared to the perfect storm for buying a home, the low interest rates, the low prices, the battle that's being waged to combat the foreclosures and stabilize pricing, plus the cherry on top of a tax credit, all converging at once to make a market that may be looked back on by those that took advantage of it in the same way that people who bought google or ebay stock in the early days get to smile and gloat about their amazing timing.

I look forward to a great spring and helping lots of buyers like you find the wonderful homes that are out there waiting for new owners.  You can reach me at 517-403-0989 or visit my website TecumsehProperties.com.  Hope to hear from you soon.

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Rainmaker
219,770
Michael Wayne Jackson
Coldwell Banker - Novato, CA
Realtor - Senior Real Estate Specialist

It sure is the perfect storm right now. I happened to buy at the peak in 2005 before I got into the business. If I could only do it all over..

Feb 04, 2009 09:27 AM #1
Rainmaker
342,754
Elizabeth Bolton
RE/MAX Destiny Real Estate Cambridge, MA - Cambridge, MA
Cambridge MA Realtor

Hi Beth,

This is a great post. I know that when I'm touring properties with buyers nowadays the thought that "you are so lucky to be buying now" keeps going through my head - you get so much more for your money right now and the interest rates are super low to boot. Like Mike I bought my most recent house in 2005 but no problem - I hope to be here for a long time!

Liz

Feb 04, 2009 09:35 AM #2
Rainmaker
455,517
John Mulkey
TheHousingGuru.com - Waleska, GA
Housing Guru

Beth, it is a great time for all those who want to buy and have the financial stability to do so.  There are wonderful bargains and great rates, my only concern is the ever-increasing number of unemployed and the overall effect that has on the economy.  Hope your 2009 is great.

Feb 04, 2009 09:46 AM #3
Rainer
20,978
Beth Anderson
Goedert Real Estate - Tecumseh, MI
Realtor - Tecumseh / Lenawee County

Mike~ The only good thing I can tell sellers who bought high is if they are upgrading, they will still come out ahead in the amount they will be saving on the more expensive home. 

Elizabeth~ You and me both.  Everytime time I turn around I am seeing another great deal.

Feb 04, 2009 09:50 AM #4
Rainer
35,624
Chris & Karen Highland
eXp Realty - Frederick, MD
Integrity, Experience, Enthusiasm!

Beth, you're right, this is a perfect storm.  People often underestimate the effect of rates, and these are historic.

Feb 04, 2009 11:00 AM #5
Rainer
20,978
Beth Anderson
Goedert Real Estate - Tecumseh, MI
Realtor - Tecumseh / Lenawee County

John~ I hope 2009 is a turning point for all of us, things can only get better it seems.

Chris and Karen~ I just read today that the $7,500 tax credit may be changing to 15,000 with no need to pay back if the home is lived in for two years before being sold.  Can you imagine not taking the government up on that deal?  Where they are getting all this money scares me though, are we fixing one problem and opening another?

Feb 05, 2009 07:24 AM #6
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Rainer
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Beth Anderson

Realtor - Tecumseh / Lenawee County
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