First-Time Buyers Capitalize On Interest Rates, Lower Home Prices and Tax Credits
INDUSTRY NEWS, REAL ESTATE PRACTICE, TIPS FOR BUYERS, TIPS FOR SELLERS
March 25th, 2010
A recent report from my trade group, the California Association of Realtors (CAR), states 47% of homes sold last year were snapped up by first-time buyers. CAR lead economist Leslie Appleton-Young predicts a dip in this number for 2010 due to the expiration of the federal tax credit. The federal tax credit, in conjunction with a state tax credit targeted at buyers of new homes, successfully moved many renters off the fence into homeownership. However, she admits her forecast for a decrease in number of first-time buyers in 2010 could be wrong if the high end home market weakens significantly.
The statistics cited came from a survey of 15,000 Realtors conducted across California last summer. The uptick is significant considering first-time buyers only made up 35.9% of buyers in 2008. The highest level recorded was 50% in 1995.
Other forecasts/findings of the study include:
- 5.8 months of unsold inventory for starter homes (6.2 months in 2008)
- 14.8 months of inventory for “top end” homes (26.9 months in 2008)
- Half of all home sales were distressed properties (bank-owned or short sales)
- Slight reduction in volume of units sold for 2010(-2.7%)
- Price increases/decreases will vary by area and price category
She predicts the strongest recovery will be in areas with the sharpest price declines and most distress properties listed for sale. The upper end will “see a more sluggish price performance over the next couple of years”. She believes the reason the middle and upper end markets will not fare as well is due to the fact prices have not declined (yet) as much as the low end of the market.
530-224-6767 or 530-941-7492
BRAD GARBUTT
REALTOR/BROKER ASSOCIATE
REAL LIVING REAL ESTATE PROFESSIONALS
CORNER OF COURT AND PLACER IN REDDING
MORE THAN A QUARTER CENTURY LOACL SALES EXPERIENCE
