The First Time Home Buyer Tax Credit
With the first time homebuyer deadline drawing to a close I am starting to see a certain "˜frenzy' of first home buyers wanting to get in on the action. Call me a bad Tri Cities Realtor® (but I am certainly ethical) if you want, but I have been known to tell first time home buyers that $8,000 is not a good reason to buy a home. On the contrary, making the wrong choice in a house can potentially cost you more than $8,000. I suppose if someone is planning on purchasing anyway the First Time Home Buyer Tax Credit is a nice side benefit, but I am seeing an inordinate number of buyers wanting to buy just for the tax credit.
Actually, I think the flurry of activity going on in the market right will drive prices up a bit in the under $250,000 price range and come May 1st there will be better deals to be had. In other words, if someone is buying a house before the credit expires for $180,000 they are really paying $172,000. But if they wait until after the credit expires that same $180,000 house may able to be purchased for $170,000 or less, because there will fewer active buyers in the marketplace.
Let me illustrate my point. Say for easy numbers there are 1,200 first time home buyers buying over the period of a year. If we average this out to 100 a month then between now and April 30th we would normally have 400 first time home buyers purchasing homes. But with the first time homebuyer credit deadline approaching the people who would have purchased from May to say September are purchasing before April 30th to get the credit putting an extra 500 buyers in the market place right now which will leave only 300 of the first time homebuyers for the rest of the year.
So, putting it all together looking at just the sheer numbers, come May 1st we will be sitting with an oversupply of homes which would normally have been purchased by the first time homebuyers throughout the remainder of the year who decided to accelerate their purchase to get this first time homebuyer credit. This, I believe, come May 1st will slow the pricing of homes in the under $250,000 price range as I said above and allow for better deals than an $8,000 tax credit.
If you are considering a home in Tri Cities Washington, please call me or email me today. :)
Posted by Colleen Lane
on
The First Time Home Buyer Tax Credit
With the first time homebuyer deadline drawing to a close I am starting to see a certain "˜frenzy' of first home buyers wanting to get in on the action. Call me a bad Tri Cities Realtor® (but I am certainly ethical) if you want, but I have been known to tell first time home buyers that $8,000 is not a good reason to buy a home. On the contrary, making the wrong choice in a house can potentially cost you more than $8,000. I suppose if someone is planning on purchasing anyway the First Time Home Buyer Tax Credit is a nice side benefit, but I am seeing an inordinate number of buyers wanting to buy just for the tax credit.
Actually, I think the flurry of activity going on in the market right will drive prices up a bit in the under $250,000 price range and come May 1st there will be better deals to be had. In other words, if someone is buying a house before the credit expires for $180,000 they are really paying $172,000. But if they wait until after the credit expires that same $180,000 house may able to be purchased for $170,000 or less, because there will fewer active buyers in the marketplace.
Let me illustrate my point. Say for easy numbers there are 1,200 first time home buyers buying over the period of a year. If we average this out to 100 a month then between now and April 30th we would normally have 400 first time home buyers purchasing homes. But with the first time homebuyer credit deadline approaching the people who would have purchased from May to say September are purchasing before April 30th to get the credit putting an extra 500 buyers in the market place right now which will leave only 300 of the first time homebuyers for the rest of the year.
So, putting it all together looking at just the sheer numbers, come May 1st we will be sitting with an oversupply of homes which would normally have been purchased by the first time homebuyers throughout the remainder of the year who decided to accelerate their purchase to get this first time homebuyer credit. This, I believe, come May 1st will slow the pricing of homes in the under $250,000 price range as I said above and allow for better deals than an $8,000 tax credit.
If you are considering a home in Tri Cities Washington, please call me or email me today. :)
Posted by Colleen Lane
on
You may be right about the May market. I am anxious to see if sales fall off after the program is gone.
Posted by Patsy Snyder on Friday, April 9th, 2010 at 1:11pmi feel enlightened after reading this. thanks for your insight!
Posted by geneva on Sunday, April 11th, 2010 at 6:59pmVery true Mary, Just keeping my fingers crossed to see whats going to happen after May 1st.
Posted by Jacksonville Real Estate on Monday, April 12th, 2010 at 4:32amLeave A Comment