The Real Estate Monitor is a research arm of the National Association of Realtors and takes a snap shot to predict the economy over the next quarter. There appear to be some bright spots in the economy, but the pace of recover will be slower than most people want.
Although the number of homes sold fell in December, this should have been expected. The deadline for the first $8,000 tax credit was November 30, 2009, and many people stopped looking for homes, when they felt they had missed their opportunity.
Now that the government has extended the tax credits through April 30, 2010, with a closing date by June 30, 2010, we should see a good upturn in sales. With the first time buyer getting the $8,000 tax credit and the move up buyer qualifying for a $6,500 tax credit, we should see a good spring market. The interest rates are holding at a very competitive level. The only thing that could derail a very busy spring will be the possible lack of inventory. Back in January 2008 there were almost 90 homes in sale in Sterling. Today in January 2010 there are 45 houses for sale. A real dilemma for potential buyers!
Many people may not be able to put their homes on the market, because they will not be able to sell them for what they owe. For these folks, it may be best to hold on to the house until the market turns around, but this may take a number of years.
Some people believe the price of homes will be better soon, and they want to wait to make a better profit on their homes. If you want to make a move, waiting may not be the best decision. If you sell your home now, and with the tax credits possible in both directions, you will have the benefit of saving money on the purchase of your new home and get an interest rate significantly lower than rates projected for our future.
With rates being held down by the Fed, future affordability of homes could be in question. Some of us remember the mortgage rates at 18% to 19% in the early 80’s, and the real estate market was in the dumps. The pent up demand in 1982 – 83 when rates were a “bargain” at 15% was something to experience.
The Federal Reserve Report for Boston gives a powerful analysis for economy in the short term. In the final analysis, if you have an interest in selling your home in a reasonable amount of time, this spring may be your time, and you should be ready to do this within the next month. The Spring Market is NOW.
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