Real Estate Information

Opportunity is knocking for those considering homeownership for the first time, and now also to current homeowners! 

The $8,000 federal tax credit for first-time home buyers is being extended, and the deal is being sweetened: Now existing homeowners can get $6,500 from the government if they buy another house.

Congress approved the $10.8 billion tax break Thursday, and the president signed it into law on Friday, November 6th.

The $8,000 incentive for first-time buyers has been in effect since January, but it was due to end Nov. 30. Now buyers have until April 30, 2010 to sign a purchase contract and until June 30, 2010 to close escrow.

We’re often asked if this is a good time to buy a home.  Some clients are concerned that home prices may fall further than they have already.  They are assuming that the best course of action is to wait for the bottom in the market and then buy.  The problem with this approach is that you don’t know where the bottom is until you see it in the rear view mirror, meaning until you’ve missed it!

Home prices are one factor in determining your cost of ownership, but so are interest rates and financing availability.  Interest rates are still near historic lows, infact they are the same today as they were in 1947.  Since your monthly mortgage payment is a combination of paying down your principal and paying the interest owed, if home prices come down a little further but interest rates go up, it could cost you even more to service a mortgage on an identical home!

While a home is a major investment, it is also the center of your personal life.  It’s important to live in a home that reflects your taste and values, yet is within your financial “comfort zone.”  To that end, it may be more important to lock in today’s relatively low interest rates and low home prices, rather than to hope for a further break in prices in the future.

Your buying power increases slightly over 2% with every 1/4 point drop in rates. For every full point that rates decrease, your buying power rises about 9%. This is the first time in the history of the United States that BOTH property prices AND Mortgage Rates are DECREASING! Rates will likely begin to rise toward the end of this year, and your buying power will decrease along with that rise. Many buyers have come back into the market to take advantage of this unique opportunity.

Please give us a call if I can be of any assistance in determining how much home you can afford in today’s market.