Nice piece in Business First of Louisville about how first-time homebuyers have made their move in today’s housing market due primarily to the tax credit currently being offered by the government. This makes a great deal of sense. Most watching the market understand that the recent increase in home sales is happening predominantly in the lower priced tiers where first-time homebuyers are focused.
What does this mean going forward? Are there still renters on the sideline watching to see what might happen next? Most assuredly.
Like I posted the other day, wise real estate decision makers should consider all four of these variables.
Chief among them are, 1) the historically low-interest rates, 2) the never before seen tax credits from the government, 3) the reduced home prices, and 4) the large house inventories across the country.
The Business First article hits on #3 with:
The median selling price declined for the second consecutive year in 2009, falling to $132,000, according to the Greater Louisville Association of Realtors. In 2008, the median selling price was $135,000.
I have to agree with Jacki Shafer in the article that these drops are “unprecedented.” Even after the huge 12% increases of the late 70’s, the “rebound” years that followed were still positive. The average annual home value increase here in Louisville, Kentucky since 1978 is 4.76%. So actually having a decrease for 2009 is something of a rarity, even if it’s very small, especially compared to the rest of the nation.
Act Before the Tax Credit Expires
For people currently considering a move, I would advise them to decide quickly as the current law requires that a sales contract needs to be finalized by April 30, 2010 in order to meet the tax credit requirement. For more specific details, visit the Federal Housing Tax Credit website.
If anyone reading this post is looking for a trustworthy Realtor®, please feel free to contact me and I’ll help you every step of the way.