Congress Passes Expanded Home Buyer Credit

Congress Passes Expanded Home Buyer Credit

Lakes Region of NH Real Estate Market Report

The wind roared through the Lakes Region this past weekend and blew most of the leaves off the trees within a two mile radius into my yard. It also blew about 100 residential listings into the expired bin on the MLS system. There were 1146 homes on the market as of November 1 in the communities in this report representing about 20 months worth of inventory. This tally is just a bit lower than the 1218 homes on the market last November. The average asking price came it at $587,664 compared to $536,037 for last November.

The median price remained relatively unchanged from last November at $299,900. Of the 1146 homes offered in the Lakes Region, 53 of them are in what is called a "contingency" status in the MLS system. A contingency status means that there has been an agreement accepted on a property but that there are conditions attached as part of the deal that must be met before the sale can take place. These properties show up in active searches rather than as pending so that buyers can still see them.

One of the more common contingencies is when a buyer has a home to sell before he can purchase another one. We have always had buyers who were in that predicament and with the market the way it is today we seem to have many more. But given how hard it is to sell any property today, sellers should think very carefully about accepting and offer with this type of contingency. Sometimes though, depending on the seller's situation and other conditions (such as how saleable the buyer's house is and how strong the offer is otherwise) it might be worth a shot. In this case, a purchase and sale is entered into that allows time for the buyer to find someone to purchase his home but also allows the seller to continue to market his home and possibly find another buyer who doesn't have a home to sell. The P&S would include a "kick-out" clause which allows the seller to accept another offer from a second buyer. The second offer would only become effective if the first buyer could not come up with a way to remove the contingency of the sale of his home within a short period of time (usually 72 hrs). The second buyer will probably end up with the property as the chances of the first buyer being able to move forward on the deal is usually pretty slim. The downside to accepting a contingency offer like this is that a contingency status listing just doesn't get as many showings as those that are listed as "active" in the MLS. But again, given certain conditions (like your home has been on the market for two years and the only person ever interested in it was your cousin Vinnie who doesn't have two nickels to rub together) it could be a way to get your home sold.

Now for some good news for the housing industry! Congress approved a bill today expanding the first time homebuyer credit to include homebuyers that have owned homes for at least five years. These buyers may be looking to "move up" and purchase larger or more expensive homes which should help the mid-range priced homes. Buyers can receive a $6,500 credit on homes up to $800,000 as long they enter into a purchase and sale agreement by April 30, 2010. To be eligible buyers must earn less than $125,000 individually or $150,000 per couple. If the buyer doesn't use the new home as a primary residence or sells it within three years he would have to repay the credit. The first time buyer credit is also extended to April 30, 2010.

Residential Homes Available November 1, 2009

Data compiled from the NNEREN MLS System.