Why the First-Time Buyer Tax Credit shouldn’t matter anymore

shanNdjones September 4th, 2010

Realtors all over the country scrambled in the early months of 2010 to find homes for buyers and sign purchase agreements by April 30, 2010, the deadline for the $8,000 first-time buyer tax credit.

Once the deadline for the first-time home buyer tax credit passed, real estate activity dropped, as evidenced by July’s statistics for pending real estate sales.  Many regions, including southern Oregon, have seen a corresponding drop in prices:  sellers whose homes didn’t sell in the wave of first-time buyer purchases have found it necessary to lower prices in order to entice buyers to look at and write offers on their homes.

Thinking about this logically, there is a far better long-term advantage to waiting and purchasing a home at the lower prices we are seeing in the market now than paying a slightly inflated price and receiving a one-time $8,000 tax credit.  Combine the lower prices with the historically low interest rates currently being offered by banks and mortgage companies, and those lower monthly payments could add up to far more than $8,000 over the life of a 30-year loan.

In an attempt to qualify for the $8,000 tax credit, many first-time buyers may have purchased a home as a hasty, emotional decision.  Without the pressure of a deadline, first-time buyers, working with qualified Realtors who have their clients’ best interests in mind, can now make rational, informed home purchasing decisions, and realize the long-term advantages of buying a home at a lower price.

Now there’s talk about bringing back the tax credit.  But as this article indicates, the tax credit in the most recent buying frenzy went to people who would have likely purchased homes anyway.  Thinking long-term, not re-instating the tax credit makes sense not only for first-time buyers, but also for the overall stability of the national real estate market, and the United States economy as a whole.

What happened to Medford Real Estate? Realtors know all too well…

shanNdjones September 3rd, 2010

Although this appeared in the newspaper, the sad fact is, it’s not news what is happening in the Medford real estate market.  It’s the same thing that happened all over the country:  over-inflated housing prices, decreased affordability, dangerous adjustable rate mortgages (with little or no down payment), all of it at unsustainable levels.  But you know the story!

Market Statistics – Jackson County Real Estate (August 2010)

shanNdjones September 3rd, 2010

Southern Oregon Multiple Listing Service has just released the real estate market statistics for the most recent three-month period (June – August 2010).  Here’s a quick snapshot:

Median price for existing homes: $170,000, -9.6%  for the same period in 2009
Median price for newly constructed homes: $212,950, +1.5% for the same period in 2009

# of homes on market as of 09.01.2010:  2201, -7.5% (vs. 2309 as of 09.01.2009)

Although only 24% of all homes on the market are bank-owned or short sales, 48.2% of all closed sales are either bank-owned or short sales.  The median price of a “traditional” home is $215,000; for the period Jun – Aug 2010, the median price for a bank-owned home was $120,000, a difference of 44%; “short sale” homes sold for a median price of $155,000, or 28% less than traditional homes.

For a quick summary, click here.  For a more detailed report, email me:  shannonj@kw.com.

Mistakes to avoid when buying a home

shanNdjones September 3rd, 2010

A recent article in the Wall Street Journal provides some great tips to keep in mind when buying a home.  This advice is especially important for first-time buyers, who easily fall into the trap of making an emotional decision when buying that first home.

  1. Snubbing the real estate agent – Realtors are paid by the Seller (in most cases), so why not use an expert when buying your home?
  2. Guesstimating how much you can afford – Get pre-approved before looking at houses.  You may learn that you can afford more than you think.  Or less than you think.  And in today’s market, most sellers (especially bank-owned properties) require that you submit a pre-approval letter with your offer.
  3. Letting charm cloud your judgment – An older home can be charming, but can come with many hidden problems.  Pay for a home inspection, and realize that you’re going to need more money for maintenance than you would if you purchased a newer home.
  4. Focusing on the house, not the ‘hood – Make sure you spend plenty of time in the neighborhood.  You can paint a room or change the carpet, but you can’t change your neighbors (well, at least not very easily!).  You’re probably going to be there a while, so make sure you LOVE it!
  5. Make arbitrary offers – It may be a “Buyer’s Market,” but most sellers, even banks, won’t accept a low-ball offer far below market value.  Find the house you love, in a neighborhood you love, and make a fair offer.  There’s never a right price for the wrong house.

Foreclosures represent buying opportunity – This Month in Real Estate Sep 2010

shanNdjones September 2nd, 2010

In this just released video, the experts at Keller Williams Realty share some important tips about buying foreclosures, and explain why the current market provides a great opportunity at realizing tremendous value in purchasing a first home, or even an investment or vacation property.

Our experts specialize in well-priced homes; if you want more information on the current real estate market, give us a call!

Who is moving to Medford?

shanNdjones June 24th, 2010

In a recent post, we told you how data compiled from Oregon’s Department of Motor Vehicles shows that more California driver’s licenses are surrendered in Oregon than licenses from any other state.

Now data from the Internal Revenue Service confirms the trend: more people moving into Oregon originate from California than from any other state. Both Northern and Southern California are represented in the migration, although those from Northern California arrive with a higher per capita income.

This map shows the migration of residents into and out of Jackson County based on 2008 IRS data.  When residents leave Jackson County, they typically head to Northern Oregon or Washington state.

Oregon Migration Map

IRS data shows where Jackson county residents move to/from.

You can read the full article here.

“Walking Away” will cost you – New Fannie Mae Guidelines

shanNdjones June 23rd, 2010

This week Fannie Mae announced a new policy that will cause “underwater” borrowers to think again before “walking away” from their mortgages.  Borrowers who do not attempt to remediate their default, or who can show no legitimate reason for default (loss of job, unforeseen medical problems, etc.) will be subject to deficiency judgment for the unpaid balance on the mortgage, not to mention having the foreclosure appear on their credit history for seven years.  Oh, and there are tax implications, too.

We’ve talked about the morals and ethics about strategic defaults here before, and we’re not the only ones who have thoughts about whether walking away is the right decision.

May foreclosures remain steady in US, up in Oregon

shanNdjones June 15th, 2010

Although the rate of foreclosure filings nationwide remained steady in May, Oregon saw an increase of 2.58% as compared to May 2009.  According to recent data by RealtyTrac, Oregon ranks 16th in the nation in foreclosure filings, with 1 in every 518 households being foreclosure.  For more information, read the full article here.

Decrease in foreclosure filings nationwide

shanNdjones June 8th, 2010

According to the most recent issue of This Month in Real Estate (June 2010), brought to you each month by Keller Williams Realty International, statistics just released by RealtyTrac show an overall decrease in foreclosure filings nationwide.

The reason for this decline could be that more homeowners are choosing a “short sale,” rather than defaulting on the mortgage (which typically results in foreclosure).

Check out the video for an overview of the short sale process.  Understanding the process increases the chances of success with a short sale.  For more information on recent foreclosure and short sales in Jackson County, click here.

Is a distressed property the right deal for you?

shanNdjones June 7th, 2010

With the first-time homebuyer tax credit deadline having come and gone, you may be asking yourself, “What now?” Fortunately, the door is now open to a new wave of savings: distressed properties.

For many buyers, the term foreclosure brings up images of run-down homes with no heat and rotting wood. While this is still the case for some homes, it’s no longer the standard. In fact, first time buyers are snatching up distressed deals in decent condition for great prices.

According to a November 2009 Keller Williams Research Buying Distressed Properties Survey, 40 percent of all buyers for bank-owned foreclosures (REOs) were first-time buyers in 2009. 50 percent of all short sale buyers were first-time buyers.

By definition, a distressed property is one that was purchased with a loan and the homeowner is no longer able to make their mortgage payment resulting in foreclosure – or if they’re lucky a short sale – meaning they owe more on the home than it’s currently worth. With a 20 percent increase in foreclosures from 2009, distressed properties still remain a large portion of home sales and are going to continue well into 2010 as homeowners continue to feel the effects of an economy on the mend.

If you’re in the market for a home and are prepared for a unique transaction, a distressed property can be a great option. Here’s why:

Prices are low – Buying a foreclosed property is an excellent way to get a home for less. Research shows you can save 10-40 percent over the price of similar properties in a traditional sale.

Mortgage costs are low – With rates hovering near historic lows, financing costs to are favorable. Keep in mind, rates are always changing. It’s important to begin the pre-approval process so that you know how much you can realistically afford.

You have options – The number of homes in some stage of the foreclosure process still remains high. RealtyTrac, a site dedicated to tracking foreclosures across the country, estimates that there are approximately 2.1 million homes in some stage of foreclosure in the United States.

Sellers and lenders are motivated – According to data from RealtyTrac, in April, one in every 387 households in the country has received a foreclosure filing. The bottom line is that many sellers are still feeling the pain of a down economy and are anxious to out get from under a home that is putting stress on their current financial frustrations. While it is still an emotional transaction, these sellers are willing to come down on price or even consider concessions such as helping out on closing costs. Banks holding on to large portfolios of Real Estate Owned (REO) properties want to unload quickly – and price these home to sell.

Your best ally when purchasing a distressed property is an expert. Always have a professional REALTOR® by your side to help you make informative decisions. If you’re interested in learning more about purchasing a distressed property, contact us today!

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