Whichever side you take on the debate, what you can’t deny is the fact that nothing has done more in the past year to jumpstart our housing market more than the $8,000 first time home buyer credit. Will all of that come tumbling down if it isn’t extended or expanded on? It’s hard to say but I believe that if it isn’t expanded we will see a definite drop in first time home buyers in 2010 and probably a much larger emergence of investors in the entry level arena. While on the surface that may not seem troubling, it actually is. The fact is that investors purchase homes solely for net profit while first time home buyers purchase homes for lifestyle. When we have a balance between the two it keeps home prices relatively stable. If one of the two disappears, we’ll likely start to see drops in home prices which isn’t good for a market that has already taken its fair share of hits.
While Congress continues to debate the issue what we as Realtors are calling for is support of an expansion of the tax credit from first-time buyers to all homebuyers, increasing the maximum amount of the tax credit from $8,000 to $15,000, eliminating the existing income caps for eligibility purposes and extending this homebuyer tax credit for one year from the date of enactment.
We believe that stimulating demand for housing—particularly in the repeat buyer market—is the most effective way for Congress to help lead the U.S. economy into a recovery and back on the path to growth. Timing is critical and we hope that Congress will hear our voices.
While the clock ticks and we await the results of the debate on Capitol Hill, let’s take a look at this week in real estate:
- Boulder/Longmont—The Boulder office reported the market stayed very steady last week with listing inventory moving by less than 1% and the amount of sales exactly even week to week. Our office showed a 10% increase in showings over the week before as agents report 1st time buyers scurrying to take advantage of the tax credit and lower interest rates. Multiple offers on lower priced short sales continues to be normal. The Longmont office reported showings have increased 10% week over week! Who knows what this fall will bring! Friday the 2nd was a recent record for showings here. I'm assuming that is the final push for the $8000 credit. This is the time to list your home especially if it's in the Longmont entry level, under $200,000. Buyers are scrambling to meet the deadline of November 30th. Lenders and title companies should be gearing up for mass closings that last week of November. Remember, that is also a "short work week.”
- Evergreen/Conifer—Evergreen reported we had a total of nine new listings for the week. Five listings went under contract during the past two weeks. There were four local buyers plus one cash buyer from Texas. Four buyers went under contract. All were local. There were a total of 77 showings during the week. Conifer reported we had only one new listing during the week. Two listings went under contract, one bank REO and one private seller. No buyers were put under contract. Showing activity decreased to 27 during the week possibly due to the holiday weekend. The Conifer office reported there was one new listing during the week. Five listings went under contract including land in Evergreen (cash buyer), one private seller (1st time home buyer) and three bank owned homes. Two buyers were put under contract including one single family home in Lakewood, a multiple offer situation. Showing activity increased to thirty eight during the week.
- Denver Central – There has been an increase in first time home buyers looking for property & wanting to take advantage of the tax credit. With the deadline (Nov 30) fast approaching and the possibility of an extension not occurring, buyers are going to have to select a property within the next 30 days to be able to close in time. Since there has been an increase in buyers taking advantage of this credit we've seen an inventory shortage for homes under $200,000. We've also seen an uptick in the average sales price which we attribute to more, move up buyers entering the marketplace. We continue to have low inventory levels in the Denver Metro market. Inventory is substantially lower than its highpoint in 2007. We continue to be excited and very encouraged about the future of the Denver real estate market.
- Devonshire— Well, here we are looking at fall in full swing. The market for first time buyers is very active with a definite lack of inventory. Sellers in price ranges that would benefit from the first time buyer program should get their homes on the market immediately. November 30 is quickly approaching. Looking at our Previews division, our homes over $600,000 show a different story although we are seeing definite signs of movement in this area. Showing activity is increasing and we're now finally seeing contracts coming in on these houses. We're still optimistic for a good 2010 in the upper end market.
- Douglas County—Our Southwest Metro office reports showings increased this past week over the previous three! Open houses were good and our Agents did acquire good leads. Our Agents do have sellers gearing up to list their homes and do have buyers starting to become worried about the deadline for the $8000 tax credit. We're seeing an increased number of buyers ready to move towards the purchase of a new home before the deadline. Our Agents feel that buyers do not want to miss this opportunity especially with low interest rates as well. Our mortgage rep is busy approving buyers and investors are wanting to take advantage of the low rates also.
- El Paso County—Colorado Springs reports the listing inventory stays steady at the moment but both showings and sales activity have slowed down during the last week. The current sellers hope for an extension/expansion of the 1st Time Buyer Tax Credit which is scheduled to end Nov. 30. Our REO Agents see a slight increase of bank owned properties hit the market. We expect that trend to increase over the next few weeks.
- Larimer County—The Fort Collins/Loveland offices reported steady as she goes - that should be the real estate motto for the Northern Colorado fall selling season. We're seeing a consistent number of homes sold at or above 98% of asking, a consistent number of homes coming onto the market and finally, a consistent number of showings. An agent with two listings put them both under contract in less than two weeks with competing offers. Both properties were priced below $250,000. There is still a significant amount of well priced inventory available so get online at www.coloradohomes.com or contact your local CB real estate professional and take a look at some great homes.
- North Metro— The North office is buzzing with positive feedback from the CBC this week. Agents are very excited about the prospects for a good 4th quarter and beyond. The current activity level is steady. Inventories are being depleted in the "1st timer's" price range and the upper end of the market remains soft. Concern on the economy continues to affect the listing activity but as the economy improves in the 4th quarter we expect market activity to do the same. Bottom line, everyone is up to the challenge of the changing market and will do what it takes to continue to be successful.
- Parker— After a drastic slowdown of showing and sales activity during August and September, the traffic is now steady again and the sales activity is stable as well. Our listing inventory has gone down slightly over the last two weeks. The traffic through open houses has increased as home buyers not only want to take advantage of the last few nice weekends, but are also in a time crunch with the ending of the Home Buyer Tax Credit.
- Southeast Metro—No information reported.
- West Lakewood—No information reported.
Here are a few informative links regarding the $8,000 tax credit that you may find helpful:
- Update: Industry Makes Case For Home Buyer Tax-Credit Extension; Wall Street Journal
- Builders Urge Congress To Act On Home Buyer Tax Credit, Appraisal And Lending Issues; National Association of Home Builders
- Homebuyer Tax Credit Best Tool For Sustaining Housing Recovery, Says NAR; NAR
- Make The Home Buyer Tax Credit More Easily Available At Closing; RISMedia
- 1.4 Million Families Have Taken Advantage Of First-Time Home Buyer Tax Credit, More Claims Expected; RISMedia
Until next week,
Make it a great one,
Chris Mygatt
Coldwell Banker Residential Brokerage Colorado
No comments:
Post a Comment