Archive for the 'First time home buyers' Category
Where is the Real Estate market headed?
categories: Alpharetta Real Estate, Crabapple, First time home buyers, Foreclosures, Local Market Conditions, Metro Atlanta Statistics, Milton Real Estate
It’s hard for homeowners and buyers to know where the market is headed because there are so many conflicting reports out there about what is happening. Depending on where and from whom you get your information things can look like they are improving or getting far worse.
Nationally
The NAR reportsthat there is a big rebound in existing home sales nationally, with first-time homebuyers driving much of those numbers. Their report says: “Existing-home sales–including single-family, townhomes, condominiums and co-ops–jumped 9.4% to a seasonally adjusted annual rate of 5.57 million units in September from a level of 5.10 million in August, and are 9.2% higher than the 5.10 million-unit pace in September 2008. Sales activity is at the highest level in over two years, since it hit 5.73 million in July 2007.”
To be sure, first-time homebuyers have been on the hunt with the impending expiration of the first-time homebuyer tax credit. They have been driving sales numbers in the $250,000 and below price ranges. An extension and potential expansion of that tax credit would help broaden those numbers and that would be a good thing.
Metro Atlanta
However, Steve Palm from Smartnumbers says “Closings for all single family had a large 16.8% year-to-year decline for September”. He goes on to say that he doesn’t think it is an issue with the recent flooding or some lenders being taken over by the FED but it’s more of a liquidity issue-there are no loans available for some buyers.
The good news is that inventory levels are down quite far, with 47,000 single family homes available for all of metro Atlanta. This is on par with inventory level in January of 2006. Another good bit of news is that the percentage of sales that are foreclosures is dropping, as you can see in the following chart:
North Fulton Real Estate
So, what is the story for us here in North Fulton, specifically Alpharetta, Johns Creek, Milton and Roswell? Well, for the cities listed above, here are the units sold and average sales prices over the past 5 Septembers:
| Sep-05 | Sep-06 | Sep-07 | Sep-08 | Sep-09 | |
| # sold | 352 | 205 | 218 | 179 | 195 |
| avg. SP | $401,161 | $400,030 | $409,002 | $414,729 | $359,328 |
The average sales price for our area is only down around 12% - 13% over the past 5 years which is far less than the metro Atlanta average of 20%. I would describe our local market status as stabilized with signs of improvement. It’s kind of like a “statistical recovery”. The numbers are pointing in the right direction but nobody really feels like it’s improving yet.
Posted by Bob Strader | Currently No Comments »
Increase The First-Time Home Buyer Tax Credit and Extend it to Everyone
categories: First time home buyers, Local Market Conditions, Stuff I like to talk about
I know, the title of this post sounds completely self-serving. You’re saying “Of course a Realtor wants the tax credit extended, oh, and even increased in size”. Here me out though.
Like it or not, both administrations passed stimulus bills to the combined tune of about 1 trillion dollars. There is no shortage of opinions on whether or not the bills were good ideas. My argument is if we are going to do something (and I think we should) then where should that money be spent. So far, according to ProPublica, a site that tracts stimulus spending, the government has spent about 19% of the most recent $792 billion dollar bill.
Economic Dollars Spent as of This Week:
- $111 billion spent
- $146 billion in process
- $324 billion left to spend
- $63 billion in tax cuts issued
- $150 billion in tax cuts remaining
Now, I’m not saying that because it’s there we should spend it all but I agree with many who are of the opinion that what has been spent so far isn’t delivering the intended effect. I think the question we should be asking is “what is the best use of those stimulus dollars?”
First, I believe that reducing home inventories will help the housing market recover which is right up there with job creation in helping the economy recover. Secondly, I don’t believe in letting the markets do their thing, on their own, with the idea that how it all falls out will be better. That line of thinking is right up there with the people who don’t believe they should vaccinate their kids. If you’re sick, you go to the doctor. If you have the flu, take an antibiotic. We wouldn’t be good stewards of our economy if we didn’t try to lessen the impact or speed the recovery of the economic crisis.
Why do I think an expanded home buyer tax credit will have a more profound impact?
Let’s start with the current first time home buyer tax credit that is set to expire on December 1st. It’s had a firm impact and has worked in spurring home purchases, in the lower price ranges mostly. These buyers did not just suddenly become capable of purchasing a home. But why haven’t they taken advantage of deals that have been available over the past 12 months? There are many buyers in a position to buy but are concerned about where their market is heading. Or they have perceptions that they’re going to get an already aggressively priced foreclosure for another 50% off - they get mired in searching for an unrealistic “deal”. The tax credit incented them to move forward now.
Buyers in other price ranges will respond to that same incentive that first-time home buyers did. They’ll want to take advantage of a tax credit opportunity while it’s there. Those home purchases will allow sellers to move and buy. It will spur purchases of durable goods like refrigerators, washers, TV’s etc. The National Association of Home Builders estimates that extending the program would create more than 347,000 jobs, generate over $16 billion in wages and over $12 billion in business income.
It’s a topic that can initiate a lot of arguments but I’m curious to hear what you think.
Posted by Bob Strader | Currently 1 Comment »
Atlanta Real Estate Turns Up in July
categories: First time home buyers, Foreclosures, Metro Atlanta Statistics
All the lagging numbers aren’t in yet but for July 2008 there were 4451 single family homes sold in metro Atlanta. Right now, for July 2009 there have been 3738 homes sold with an additional 1444 homes in pending status which were scheduled to close in July - bringing the total closings to potentially 5182. If all of those pending transactions actually closed in July then that would represent a 16% increase over the previous year.
Now, some of those certainly got shifted to August closings so the actual number will come in lower than 16% but July has shown us the first year-over-year increase in the number of sales in over 3 years.
A majority of those transactions can be attributed to a combination of first-time home buyers and foreclosure sales. In fact, foreclosures and short sales made up 31.8% of all metro Atlanta homes sold for the 2nd Qtr. of 2009. While this isn’t a surprise, what might surprise you is that percentage of foreclosure sales is lower than 1st Qtr. 2009 which was almost 37%.
This can partially be attributed to demand but also, many banks have been slowing the foreclosure process to determine what changes may take place with loan modification rules. So, the 64-million dollar question is, “how many more foreclosures will hit the market and when?”. There certainly is an appetite for distressed properties but with currently inventory levels going down, an onslaught of new foreclosures could slow us up again. Inventory levels for single family homes haven’t been this low since the end of 2006.
There is hope that the first-time home buyer tax credit will be extended beyond the December 1st deadline but as of right now that is still the deadline. The bottom line is that while deals continue to present themselves, we’ve definitley bottomed and have started what I think will be a slow but steady recovery for the local real estate market. Tell me what you think…
Posted by Bob Strader | Currently 1 Comment »
Your’re going to give me money and I can have it now?
categories: First time home buyers, Lending, Stuff I like to talk about
Thanks Uncle Sam! As you all have probably heard, there are 2 tax credits available for home buyers right now.
The Federal government is offering an $8,000 tax credit (up to 10% of the purchase price) for first-time home buyers (anyone who has not owned a home in the last three years). To be eligible, you can’t make more than $75,000 per year as an individual or $150,000 per year filing married.
Also, as of May 11th, 2009, the State of Georgia is offering an $1800 tax credit (or 1.2% of the purchase price) which ever is less, for any home buyer. This will be received in installments over three years.
Here is where it gets interesting. First time home buyers can now borrow against their federal tax credit for down payment. The department of Housing and Urban Development recently announced that FHA approved lenders and other governmental agencies / non-profits can advance the amount of the tax credit coming to the buyer with short-term or “bridge loans.”
This is enourmous help for first-time home buyers who may not have the down payment necessary to buy a home. BUT - for the $8000 credit you must purchase a home by November 30th, 2009. The $1800 state tax credit is only for home buyers who purchase by November 11th, 2009.
Real estate will lead us out of this current economic crisis. While in my opinion these tax credits fall far short of what we could have (and should have) done to spur home purchases, it is a great opportunity in the next six months for those thinking about buying a home to make the leap.
Posted by Bob Strader | Currently No Comments »
