Cindy's Blog

Well, the roller coaster of the market doesn't seem to be settling down any time soon, but at the risk of repeating myself, it really is a great time to buy.

While mortgages for folks without great credit, etc. are tougher to come by, and rules are more strict for everyone (arguably not really a bad thing!), it is very possible right now to get a mortgage with rates in the 5's- that is completely fabulous, and who knows where we'll be after the election? It could go down, but it could also go up.

There is still quite a lot of inventory out there, and more folks are buying, and selling, but the supply is still greater than the demand, so as a buyer, you are still in the driver's seat, to some degree.

As for sellers, there are people buying, and they are not all "stealing" homes. It is more important than ever, in my opinion, to have a good agent on your side to really work for you, and for you to be prepared to get things done- you need to be prepared to reduce the price if necessary, as well as get things done that might be needed (painting, etc.)

Well, once again, it's time for the weekly update on the market- although sometimes it seems like daily or hourly updates are more needed. My hope, as I know many people's is, is that things perk up a bit with the election is over. Regardless of which way it goes, it at least removes one question mark from the table...that's my theory at least.

I have some really terrific listings right now (check them out!) but the competition out there is stiff, particularly when it comes to prices. Many folks put their homes on the market, competitively priced, only to then find that there are a number of other homes dropping their prices almost immediately. Trust me, no one wants to win the competition of price dropping!

One of my past clients, though, sent me some interesting info today, from the Wall Street Journal's Real Time Economics Blog. Per research done by the real estate website Zillow.com, almost half of homeowners think that they are immune to price declines in the market. It's important to remember that while it is a great time to buy, and people get excited about that, it's not a great time to sell (clearly a much less exciting prospect). However, it is just as important to remember that there is never (in my recollection) going to be a market where you can sell high and buy low with any sort of predictable consistency.

"Despite a financial crisis, market volatility and continued indications of declining home prices, 17% of homeowners told Zillow they think their own home’s value stayed the same over the past year, while 32% said their home has appreciated in value. Zillow estimates that nearly three-quarters of homes have lost value in the past 12 months.

However, the numbers in the third-quarter indicate that more homeowners are seeing the effects the bursting of the housing bubble has on them. In Zillow’s second-quarter survey, 62% of respondents thought that their home value had increased or stayed the same over the past year.

The survey was conducted Oct. 7-9, while stock markets tumbled in one of the worst selloffs in history, making the results all the more surprising."

While the market in the Richmond area has definitely fared better than so many around the country, things have been at a good bit of a drag for the past few months. It's definitely a great time to buy, particularly if you're renting, and not the worst time to sell, as long as you're buying- you'll definitely pay less on that end, though you may well have gotten less on the sales end.

In my opinion, however, the economy, at least the real estate portion (obviously, quite a large part) is not going to fully recover until people really start thinking realistically as sellers, and knowing that the market value of their home truly is only what the market is willing to pay. Unfortunately, there really are still a lot of folks who believe that their homes are just that much better than all the other homes in their area. (This is usually true of people in any market), and also lots of folks who believe that their home, for some reason is truly, illogically, unaffected by the market conditions that everyone else is experiencing. The most difficult, though, are perhaps the clients who say they "have to" get a certain price for their house, even though that's well beyond what the market will bear. There is no way to either explain this to the "market" and certainly no one we can make them care, regardless of how nice they are.

I really do firmly believe that until we have more normal prices, things are not really going to improve. Hopefully this will happen sooner rather than later!!

Well, I feel like I repeat myself with each post, but I've got to say that things are in fact selling, it is just more difficult. In the same vain, though, it is a terrific time to buy! With rates still consistently below 6%, and still quite a few programs out there that will help get you in a house, even if you're not the "dream borrower" that the media tells you you have to be.

Now, by no means, is it easy, but it is definitely still happening, and it is a great time to get a really good deal on a home. One thing that has been coming up more and more recently, is the fact that appraisals on those homes people are buying are leaning, in many cases to the lower end, so that's becoming difficult. In theory, if they're well priced to begin with, that 's less likely to happen, but it is definitely something to be prepared for, and the way that it's done has even become a good bit more difficult as well.

It used to be that appraisers could use comparables from within the last year, and there were usually a fair number of homes that they could use as comparables. Now, they will not take anything that is "older" than 6 months, and in a market that has not seen a great deal of sales in that time, that is quite difficult. Hence, it's harder for them to come up with homes that are truly comparable, and harder for them to get those comparables to come up with a good price.

So, be prepared, when you are getting a loan, that the lender is going to require an appraisal, and they will expect that it is at the sales price, or more, particularly if you are getting a standard loan. Basically, the bank is going to lend you 80% of the appraised value. If you are putting down 30, 40, 50%, the appraisal becomes less important, but for most people, this does become an issue, and it is, in this market, becoming more and more of an issue.

Well, once again, I must apologize for the lapse in time since my last post. That's what seems to make up fully half of my overall posts, unfortunately. As you can imagine, the market has been a bit of a wild ride recently! With the crazy collapse of the many banks and lenders, on top of the already imploding consumer lending markets, it seems that things have gotten even crazier than they were before.

Homes are selling, though, and if you're in the market to buy, there are still loans out there to be had, and programs if you need them. One that alot of people don't know much about is the First Time Buyer Tax Credit- if you're in the market for your first home, or at least haven't owned a home in at least 3 years, you can take advantage of it if you meet certain criteria.

The First-time Home Buyer Tax Credit was passed this year as part of the Housing and Economic Recovery Act (H.R. 3221) on July 30 and targets any individual or household that hasn’t owned a home for at least three years. Taxpayers can take the credit on their 2008 tax return if they bought their house this year after April 9.

It’s worth up to $7,500 and can be taken in a single tax year. Authorization for the credit ends July 1, 2009, so even if you don't buy until the first half of 2009, you can take the credit on your 2009 tax return.

The actual credit amount is set as a percentage of the home purchase amount. That percentage amount is 10 percent, so you can get 10 percent of the home price credited against your tax liability, up to a maximum of $7,500.

Income limits are $75,000 for individuals and $150,000 for households. Individuals whose income exceeds the $75,000 limit but isn’t more than $95,000 can still take the credit but on a reduced basis. The same thing applies to households earning up to $170,000.
Any house is eligible as long as it’s a primary residence and is in the United States.

To help keep the program cost effective for taxpayers, the federal government requires the tax credit to be paid back in small, 6.67-percent increments over 15 years. For that reason, some analysts have likened the credit to a 15-year, interest-free loan to help make home buying affordable.

There’s one restriction on the type of financing that you can use if you plan to take the credit. That restriction is on tax-exempt mortgage financing. That only applies if you're  using below-market interest-rate financing from a public agency or nonprofit that’s funding the loan using proceeds from a tax-exempt mortgage-revenue bond issue. For most buyers, this won’t be an issue. It’s mainly an issue for low-income buyers using special mortgage financing.

Yes, this may sound a bit confusing, but if you think you may qualify, here are some frequently asked questions that may help you determine whether you do, and how it works. It really is rather simple, in that there is no pre-financing application or paperwork- you just file the purchase on your taxes. If you have any further questions that are tax specific, give your tax professional a call. But if you think you might be thinking this is a great time to buy a home, call me!