Why Tucson, Arizona?
Near-Perfect Temperatures All Year
Lots of Things to Do
Lots of Nearby Places to Visit
Golf Courses Galore
University of Arizona
Theater and Arts
For additional information on the greater Tucson area, Vail, Marana, Oro Valley please email or call.
Richard Lecinski
Long Realty Company
Tucson - Oro Valley Arizona
http://rlecinski.longrealty.com
520-834-4663
|
|
||||||
|
Richard Lecinski
Long Reatlty Company
Tucson, AZ
520-834-4663
http://rlecinski.longrealty.com
Fear and Greed in the Real Estate Market
The Best Could Be Yet to Come
Last year, a study was released by the Joint Center for Housing Studies of Harvard University. The study reflects upon the housing bust that began in 2006 and deepened into 2007 and 2008. While much of what has contributed to the housing market's decline has already been widely covered elsewhere, this report also demonstrates what potentially lies in wait.
"Be greedy when people are fearful and fearful when people are greedy," says Warren Buffet, one of the richest men on the planet. And with so much fear in the real estate market right now, you may be wondering now that spring is officially here, "Is now the right time to buy a home?"
This month YOU Magazine turns to Barry Habib for an answer to this important question. An expert in the mortgage-backed securities market, Barry Habib is Chairman of Mortgage Success Source and founder of Mortgage Market Guide. Mr. Habib has managed a hedge fund, authored a stock advisory newsletter, owned an insurance agency, and has been an avid real estate investor for many years.
Habib says that one way to determine whether the time may be right for you to consider buying a home is to start looking at the rents in your community. When a full mortgage payment, including principal, interest, taxes and insurance begins to equal or fall lower than rental rates, the market is typically near the bottom, and you should see housing begin to stabilize. In many parts of the country, we have already seen this occur.
According to the National Association of Realtors, median home prices nationally fell 15.5% in February from the previous year. The median price, not the average price, represents the market price for a given period of time where half the homes sold for higher and half sold for less.
First American CoreLogic breaks down the numbers on a state-by-state basis. Looking at some of the worst-hit individual states, January brought the following information from its LoanPerformance HPI numbers:
The LoanPerfomance HPI is based on extensive data of more than 30 years of information on repeat sales transactions of specific homes and time between sales which CoreLogic states offers a more accurate "constant quality" view of pricing trends.
What's interesting about the numbers is that depending on who you are speaking with, the numbers can be dramatically different. For example, the State Association of Realtors reported in January that home prices in California fell 41.5% and in Florida fell 33%, as compared to down 26.7% and 19.5% for California and Florida respectively.
In reviewing the CoreLogic numbers on a state-by-state basis, the median number for January would be in the 3.3 to 3.7% decline range.
The point here is that, while the general media would lead you to believe that the sky is falling, things may not be as bad as they seem. In fact, if you eliminate the six Habib adds that when you compare the value of buying versus renting in your community, which includes ownership, future appreciation, and tax advantages, the choice is clear. It simply makes more sense to own right now than to rent in many communities.
For first-time home buyers, it makes even more sense to buy right now. Not only are home prices lower than they have been in the last five years, mortgage interest rates, at the time of the writing of this article, are near historical lows - this means your parents and your grandparents couldn't have secured a mortgage at a lower rate than you could've in the last month.
To add to this advantage, the government is offering first-time buyers (anyone who hasn't owned a home in the last three years) a temporary tax credit of up to $8,000 that doesn't have to be paid back. What's great about this credit is one can even amend their 2008 tax return to recapture the credit this year, which means they don't have to wait until next April to get their money.
Habib discusses how population growth affects real estate demand and values. During the housing market's boom years of 1995 to 2005, household growth was approximately 12.6 million. In the next decade, 2010-2020, it is estimated that household growth will increase 14.4 million.
This increase in households will come from a number of different factors, says Habib, including households resulting from divorce, "echo boomers" becoming adults, and a continued increase in immigration. Any increase in any one of these areas could lead to an increase in demand for housing in the near future.
The Greater the Need, The Higher the Price
The more you want or need something, the more you are willing to pay for it. It's simple economics. Take housing, for instance. Inventories are up, fewer people are buying today as compared to a few years ago, and prices have declined.
As prices decline, builders build fewer homes. Even though new homes sales were recently reported higher for the month, the number still represents an annualized decline of nearly 1.4 million homes since 2005.
With multiple-year declines in new construction, this simply means that as more people come into the market to buy a home, there will be fewer homes from which to choose, and prices will be forced higher.
So What Now?
While this article is a discussion on whether or not now is a good time to buy, it's also important to look back a little. In just the last few months, the number of homes being sold has increased. Compared to February of 2008, existing homes sales this February increased 5.1% and new home sales were up 4.7% across the country. Even more telling is that in the areas where housing has been hardest hit, buyers are coming out in droves. California, up 83%; Florida, up 24%; Las Vegas, up 28%; Miami, up 47%. Buyers are clearly excited and are looking at property - and more home sales are occurring.
No one can time the market perfectly and find the exact bottom. But even if you don't, it's okay. Interest rates are at their lowest in decades, home prices are extremely low, and this combination yields the greatest increase to home affordability in years.
To find out how you might be able to benefit from the best home buying environment in years, email me or call.
Richard Lecinski
Long Realty Company
Oro Valley - Tucson Arizona
520-834-4663
http://rlecinski.longrealty.com
$250 Economic Recovery Payment for Government Program Beneficiaries
Mainly geared toward retirees, the one-time $250 Economic Recovery Payment will be doled out to the following government program recipients.
* Adults eligible for Social Security benefits and anyone eligible for Supplemental Social Security Income (SSI) except those who receive them while in a Medicaid institution.
* Adults eligible for Railroad Retirement benefits
* Adults eligible for veteran's compensation or pension benefits.
To cash in, you must have been eligible for at least one of the programs listed above for at least a month during the three-month period that includes November and December of 2008 and January of 2009.
The IRS is figuring out how to get payments underway within the next four months.
Note: If you receive the $250 Economic Recovery Payment, it gets subtracted from any Making Work Pay credit that you would otherwise be entitled to collect.
First-time home buyer tax credit
Right now, an $8,000 tax credit is being offered by the government to enable aspiring homeowners to buy their first home. Even if you pay no taxes the government will give you the $8000.00.
If you are eligible, the tax credit can help ease the financial transition from renting to owning. It can assist with buying furniture and home-décor; making home improvements - like remodeling, landscaping and painting; or paying down debt as you adjust to new monthly expenses. Homes purchased between January 1, 2009 and December 1, 2009 are eligible.
--------------------------------------------------------------------------------
The tax credit is part of the American Recovery and Reinvestment Act of 2009, signed into law on February 17, 2009, and enacted to help stabilize the housing market and strengthen our overall economy.
Are you eligible for the tax credit?
The tax credit is designated for first-time home buyers.2 A first-time home buyer is defined as a buyer who has not owned a home in the last three years.
The tax credit is equal to ten percent of the home purchase price, which is capped at $8,000. Single taxpayers with incomes up to $75,000 and married couples with incomes up to $150,000 qualify for the full tax credit. Single taxpayers with incomes between $75,000 and $95,000, and married couples with incomes between $150,000 and $170,000 qualify for partial credit.
All homes purchased between January 1, 2009 and December 1, 2009 including single-family, townhomes, or condominiums will qualify for the tax credit, provided that the home is used as the principal residence. This also includes new construction homes if occupied by December 1, 2009.
For further information about eligibility requirements and limitations, visit www.irs.gov .
There is a very limited amount of money for down payment assistance if you need. Please call me for details.
Richard Lecinski
Long Realty
520-834-4663
http://rlecinski.longrealty.com
 |
|
|
Real estate services in the Oro Valley, Greater Tucson, Vail and Marana areas. I work with a team and we can cover much of Southern Arizona including Rio Rico and Nogales. My phone is always on.
ActiveRain Corp. is not responsible for the accuracy of the site's content (which is written by members of the ActiveRain Real Estate Network) and does not endorse the views of the real estate agents, mortgage brokers, and others listed here.
Powered by the ActiveRain Real Estate Network
© 2009 ActiveRain Corp. All Rights Reserved
