Tax Credit Expired..Still A Good Time To Buy?

Now that the tax credit has expired I am fielding a lot of questions from people saying is it still a good time to buy a house? There is mixed views from fellow Real Estate agents and investors out there about this topic. Some say this is better time because the sellers are more likely to be motivated to sell due to the drop in buyers coming into the market. Others say no, there is a bottom line all sellers are going to take and the expiration of the tax credit is not going to change that. As well as an increase in foreclosed homes going on the market. My personal view is YES .

Yes, it is a good time to buy. Fort one; at the end of April I saw more homes go into a multi offer situation. By this I mean, more than one family was putting an offer in on a home. Thus the sellers were coming back and asking for highest and best offers. In a lot of cases the sale price was exceeding the asking price on the home. With the tax credit no more there is less likely to be that multiple buyers looking at the same home. People were willing to pay a little more to ensure they received the home and the tax credit.

Second, you are going to see homes on the market where less people are viewing them now. March and April saw a dramatic spike in the amount of homes viewed. According to one study the internet searches increased by 32% for the month of April alone. A lot of people who were ready to buy but might have been a couple of months out decided to cash in on the tax credit now rather than wait and lose the money. Thus, sellers that have to sell or want to sell are probably going to be more motivated to negotiate a deal with you right now.

Third, inventory levels are at a high right now and with the increase of homes coming on the market from foreclosure there will be a good time to find that right home at a fair price. When the Obama administration put a freeze on foreclosures at the end of last year it created a backlog of files. As the banks sift through that backlog and people are unfortunately losing their homes inventory levels are going to increase. In fact, most economists think that the surge in foreclosed homes that are on the market are going to increase by as much as 30% over the next four months. However; banks are doing more work on homes right now in terms of paint, carpet, and general maintenance to make the homes more sellable at fair market value. Thus keeping prices stabilized.

The bottom line, is there are still very good deals out there. Rates are still at historic lows. People are still going to buy homes. Are there going to be as good of deals as there was last month? Maybe...however; you may have to search a little harder for them. I personally feel that the market is starting to show signs of stabilization. Home prices have risen for the first time in three years. I do not think that is going to change now that the tax credit is gone. Banks are starting to do work on homes and making them sellable at fair market value rather than taking a loss and selling homes AS IS.

Dave diCecco

Realtor/Broker

www.davedicecco.com