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Raleigh, NC

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Zillow cheif economist speaks about new home buyer tax credit changes

11-07-09
Jason Graves
Jason Graves: Real Estate Agent in Raleigh, NC
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Did you know that on-line home valuation monster Zillow.com has a chief economist? I like that they do because I feel opinions like his are market driven and not reports written for stock analysts.

Read New Homebuyer Tax Credit Proposal: Impact on the Housing Market by Stan Humphries. In his post he writes "Until now, we've been predicting that home values will likely bottom in the second quarter of 2010. But the tax credit could change that substantially, for several reasons." Following the guidelines of supply and demand and points out that the tax credit will increase demand but the addition of move-up buyers now included in the incentive will have an impact on supply and ultimately home prices. For a move-up buyer to take advantage of the incentive, they must first sell their existing home. With the incentives in play, what will happen to home prices?

The extension of the tax credit to existing homeowners brings not just demand into the market, but also an equal amount of supply (i.e., they have to sell their home in order to buy another). The existing tax credit to first-time home buyers was pure demand. Every buyer that was spurred to enter the market helped push inventory levels down by increasing demand relative to supply. With the existing homeowner tax credit, current homeowners are trading homes between themselves. What will be interesting to see is whether this game of musical chairs unfolds in an orderly fashion (i.e., some homeowners buying a new home before selling theirs; others doing the opposite) or whether skittishness about the market will lead more homeowners to try to sell their home first before buying a new one. The latter scenario could lead to more near-term supply than demand, which will push inventory up and prices down.*

My response:

You make some good points but I think your insight about inventory levels increasing and prices decreasing could be a book in itself. I would compare it to using software to predict storm paths like hurricanes, there are so many variables that it would take years of theory development to draw any viable conclusions. Now that we are adding a human element to the equation, get ready to be stymied.

Our growth in the Raleigh, NC real estate market has taught me an important fact: New construction will win 90-95% of the time when in direct competition with re-sale properties. People here who put their homes on the market for no other reason than they want to take advantage of the tax credit will not have a major impact on prices. They lack the motivations that many current sellers have and I don't expect they will add much downward pressure on home prices in Raleigh.

Even when our market was moving at a faster pace, our volume of new construction homes kept re-sale prices in check. Builders are adjusting their pricing through the margins they charge and the type of inventory they build. New homes are cheaper now than in 2006 and will continue that way for the next few years.

Only pocket areas of high desirability really saw bloated appreciation.

My prediction for Raleigh:

Prices will stay flat through winter with small, incremental increases through 2010. An outstanding year to buy in our market for individuals that will live in their home at least 3-5 years.

(Part of my thinking stems from forecasts of 3.5% growth/year through 2025).

This post was originally written for my regular blog. Raleigh Real Estate News. You maye read more available stories at http://www.gravesrealtyassociates.com/raleigh-real-estate-news-blog/

*Stan Humphries.New Home Buyer Tax Credit Proposal: Impact on the housing market. Zillow Blog. 11/06/09. http://www.zillow.com/blog/new-homebuyer-tax-credit-proposal-impact-on-the-housing-market/2009/11/05/#comment-192965

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First time home buyers credit $8000 extended by Senate and new $6500 credit..

11-05-09
Hannah Chan,GRI Cary-Raleigh Realty,Inc. Experienced Broker with a serving heart!
Hannah Chan,GRI Cary-Raleigh Realty,Inc. Experienced Broker with a serving heart!: Real Estate Brokerage in Cary, NC
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If you are currently homeowners and owned your homes at least 5 years would be eligible for tax credits up to $6500. The credit is good for purchase your principal homes costing $800K or less and would be phased out if you made more than $125K or $225K for joint filers.

Senate voted on Wendesday to extend First-time homebuyers tax credits of and expand the tax credit to includebuyers who already own homes.

In my opinion, the home buyers credit extend to existing home owners defintely a good idea cause the $8000 credits actually helped a lot of my first time home buyers to pay for their closing cost and to digest most the starter homes and foreclosured homes inventories priced under $250K in our area. But we have a high inventories which are priced $315K or up and so I can see once the $6500 credit approved by the house and will have a positive impact and to reduce those range. But you will need to meet the time limit and income limit in order to get the $6500.

To qualify for the tax credit, you will need to sign a purchase agreement by April 30, 2010, and close by June 30, 2010. Anyway, it defintely a good news to a lot of existing home buyers and I can see a lot of my buyers will able to take advantage the $6500 tax credit and is defintely one step forward to stabilize the existing housing market! I can see the housing recovery is right at the corner....

Anyway, it is not final until it is passed by the House but will defintely keep you update and talk more how you can take advantage the $6500 credit if you want to trade up your current homes.

Hannah Chan Broker, GRI - Your Entrusted Real Estate Advisor in Traingle

Broker/Owner

Cary-Raleigh Realty, Inc.

919-426-1854

919-468-1570(Fax)

Email: caryraleighrealty@yahoo.com

Website: http://www.caryraleighrealty.com

Blog: http://caryraleighapexmorrisvillerealestate.blogspot.com/

Profie: http://www.linkedin.com/in/hannahchan

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Raleigh Ranks in Top 10 Best Places to Live by Relocate-America™

11-04-09
Linda Trevor, ABR, CRS, ePRO, CHLMS, PMN
Linda Trevor, ABR, CRS, ePRO, CHLMS, PMN: Real Estate Agent in Cary, NC
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Top 100 Places to LiveThe "City of Oaks" accolades continue to build! Relocate-AmericaTM released its 2009 Top 100 Places to Live in 2009 and Raleigh ranked in the Top 10. This is the twelfth year for the annual list with nominations accepted throughout the calendar year.

For more details, visit: http://top100.relocate-america.com

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Dutchman Downs - Wake County NC - Fall Pictures

11-03-09
Nellie Lytvinenko - Homes by Nellie, Raleigh NC
Nellie Lytvinenko - Homes by Nellie, Raleigh NC: Real Estate Brokerage in Holly Springs, NC
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Dutchman Downs Subdivision is in Wake County NC . We are out in the county, although surrounded by Cary - Apex - Holly Springs NC ! No doubt we'll be annexed into Cary NC the next couple of years. In the meantime we can enjoy a couple of acres, low taxes and bon fires!

Many Dutchman Downs residents have banned together with a STOP CARY campaign. I hope it has good results!

Thought I'd share some pictures from Dutchman Downs - Raleigh NC address; Wake County NC location; surrounded by Cary NC city limits. UGH.

foreign invasion of weeds!\

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Great for Raleigh Real Estate! Senate passes tax credit extension

11-03-09
John Huber
John Huber: Real Estate Agent in Raleigh, NC
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The Senate voted 85-2 in favor of extending the tax credit for first time homebuyers. The overwhelming support probably indicates that the president will likely sign the extension very soon, giving hope to all of those first time homebuyers who couldn't quite make the 11/30/09 deadline. Here's the need to know info on the new bill:

First time homebuyers will receive $8,000 as a pure credit (it does not need to be paid back) if they contract on a house by 4/30/09. As of right now (I will update you on any changes), the bill allows you to get under contract by 4/30/09 and close by 6/30/09. So, if you are a first time homebuyer, I would recommend aiming for an April closing date (at the latest) so you don't have to rush at the last minute.

There is one other interesting aspect of the new bill. There is a $6500 credit for "move up" buyers. The bill stipulates that anyone who has lived in their home for 5 years will be eligible to take advantage of this $6500 if they buy a new primary residence.

I'll have more details as they develop... Call me or email me with questions.

The Raleigh real estate market will see some benefit to this bill as there continues to be an excess inventory of foreclosure properties available. About half of the properties that are selling right now are either short sale or REO (bank owned foreclosures). This tax credit will allow the market to absorb some of this inventory, as many first time homebuyers choose to buy foreclosures. Most of the national market continues to see signs of improvement as well. I am excited about the prospect of real estate in 2010, as it remains a buyers market and people who take advantage of buying property now, will reap huge rewards when the cycle shifts back toward a seller's market. I anticipate the Raleigh real estate market to lead the way in many categories during the next few years, especially certain locations such as downtown Raleigh real estate, and North Raleigh real estate.

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