Sales of single-family, re-sale homes rose 27.9% in December compared to December 2008. With the extension, and expansion, of the tax credit for buyers, we expect sales to be strong through Spring because of the first-time home buyers tax credit of $8,000 for buying a principal residence. First-time buyer is a buyer who has not owned a principal residence in the three-year period prior to the purchase. There are some income limits. For full information, see: http://federalhousingtaxcredit.com.
The Annual Report
In addition, the tax credit was expanded to include move-up buyers. The tax credit for move-up buyers is $6,500.A move-up buyer is a person who has owned and resided in the same home for at least five consecutive years of the eight years prior to the purchase date. Again, for full info, see the web site cited above.
(P.S. The tax credit expires April 30th. You need to have a signed contract by then and close the sale within 60 days to qualify for the credit.)
The best that can be said about last year is it*s over! Home sales were up 28.7% from 2008, which was an abysmal year for sales. The 11,722 re-sale homes sold last year almost matched the 2006 number of 11,848, but is still a far cry from the 15,000 plus homes sold in 2004 and 2005. The median price dropped 20.2% from 2008. The good news in all this is that prices bottomed out in the first quarter and started strengthening the last nine months of the year.
The year ended with inventory at its lowest level since January 2006. Other positive indicators as we start the new year include: Days of Inventory, which is how long it would take to sell all the homes on the market at the current rate of sales, ended the year at 50 days. We have to go back to the boom years of 2004 and 2005 to see numbers that low.
The sales price to list price ratio, or how much a buyer paid for the home compared to how much the seller was asking, was over 100% for the last six months of the year. When you see that happening, it means there were multiple offers. Buyers are out there, but they*re looking for bargains. Which begs the question, what is a bargain? A deal has nothing to do with the sales price to list price ratio. Remember, you are going to have to live in that home and that neighborhood.
The most important thing is to find a home, in a neighborhood, you want to live in. If the house is fairly priced, make an offer. But understand, if the house is fairly priced, or even a little under priced, and it is a good house in a good neighborhood, there will be multiple offers. If you find such a home, you can’t hesitate. It is endemic among buyers that the deals are in bank-owned (REO) or short-sale property. But, banks have the property appraised before they put it on the market, and they price it at, or just a little below, market value. Which is why we’re seeing multiple offers and prices going over asking. The real estate market is very hard to generalize. It is a market made up of many micro markets. For complete information on a particular neighborhood or for an evaluation of your home’s worth, call or email me. (Direct – 408-406-6035)