March 4, 2009

Is Now the Best Time to Buy Real Estate? ...

"A buyer’s market should be just that – a buyers’ market. It’s not a fence-sitting, waiting, delaying, dawdling, postponing, vacillating, hesitating, wavering, faltering, pausing, foot-shuffling market. It’s a buyer’ market. By its very name it means buyers should be doing one thing and one thing only – buying. So where are the buyers, and why aren’t they buying?

The great irony of a buyers’ market is that even though the opportunity to buy is high, buyer urgency tends to hit an all-time low. The media becomes the excited purveyor of negative news and uninformed advice, and buyers buy it all. Actually, it feels like the only thing they’re buying. Their reluctance is ironic since not so long ago buyers were incredibly excited about buying – and it was a sellers’ market. Prices were escalating and it was perhaps one of the most difficult times to buy value and yet people were buying like there was no tomorrow. Buyers were afraid of losing out by not buying, even though the advantage was all to the seller.

Now a shift has occurred. Fear is still in the driver’s seat but the tables are turned – the fear of paying too much seems to stop most in their tracks and immobilizes them. When they should have been afraid of paying too much they weren’t , and now that they shouldn’t be afraid of paying too much they are. It’s one of the great paradoxical moments of any market and the herd instinct at its most pure. Reluctance in the face of great opportunity becomes an agonizingly defining characteristic of a shift.

There are two types of buyers – those who believe they can time the market and those you are always in the market and believe timing will find them. History support the latter – is says that if you’re always actively paying attention, although you may never sell at the peak or buy at the bottom, you can buy right and always do well over time. Logic says that you can’t predictably time the market to be able to buy at the absolute bottom and sell at the absolute top.

People who buy in a buyers’ market are the smart ones. They aren’t looking for a killing because they know that’s a matter of luck, not planning. They’re looking for a sound decision with a predictable result and, therefore, ask the questions: “Has the market dropped enough now to make a sensible purchase?” More often than not, when they’re asking this question, they’re already in the safe zone and the answer is yes."

* Excerpt from an article by Gary Keller "Turning Buyers Around", Realtor Magazine Jan. 2009

March 4, 2009

Expanded Tax Credit for First-Time Homebuyers

Treasury Department Touts Expanded Tax Credit for First-Time Homebuyers

Credit Offers Up to $8,000 to Qualifying Taxpayers Now

Latest Move in Swift Implementation
of Administration's Recovery, Stability, Affordability Plans

Washington, DC In an ongoing effort to deliver on swift implementation of the Obama Administration's recovery, stability and affordability plans, the U.S. Department of the Treasury touted today the availability of an expanded tax break for first-time homebuyers a provision under the American Recovery and Reinvestment Act of 2009 that will make up to $8,000 available now to qualifying taxpayers who buy homes this year.

First-time home buyers represent a significant portion of existing single-family home sales. In 2008, nearly one out of every two homebuyers were buying for the first time, and the expansion in the first-time homebuyer credit will make it easier for first-time home buyers to enter the housing market this year.

"The expansion of the first-time home buyer tax break as part of the President's recovery agenda gives money to taxpayers when they need it most, while also targeting an important group of buyers," said Treasury Secretary Tim Geithner. "We view our economic recovery plan, our financial stability plan and now this homeowner affordability plan as three legs of the same stool an integrated whole that represents our immediate response to the current crisis. We remain committed to swift, efficient and effective implementation of all of these components."

The announcement comes on the heels of the first Recovery Plan Implementation meeting led by Vice President Joe Biden at the White House this morning; Secretary Geithner was among several Cabinet secretaries to attend and offer updates on implementation efforts in progress at Treasury and its bureaus. Vice President Biden is overseeing the Administration's implementation of the Recovery Act's provisions.

The Internal Revenue Service (IRS) has posted on IRS.gov a revised version of Form 5405, First-Time Homebuyer Credit to incorporate provisions from the American Recovery and Reinvestment Act. Under the new law, qualifying taxpayers who buy a home this year before December 1 can claim up to $8,000, or $4,000 for married individuals filing separately, on either their 2008 or 2009 tax returns. Unlike the prior first-time homebuyer credit, this is money individuals do not need to pay back.

To view the form and additional information on who can and cannot claim the credit, income limitations and repayment of the credit, please visit www.IRS.gov

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