Wednesday, February 25, 2009
Perfect Storm for First-time Homebuyers!
Dear Sue,
I graduated with a master’s degree in business administration a couple of years ago. I was lucky to land a great job with a wholesale grocery outlet and I have been able to develop and maintain excellent credit.
My financial advisor said that I could repay my student loans and buy a house. He said that I needed to take advantage of the great incentives that the state and federal governments have just put into place.
As a first time buyer what would you suggest that I do? What incentives are available?
First Timer Casey
Dear Casey,
I wish that I were a first time homebuyer today. The market conditions are incredible. The perfect storm for a financial crisis has turned into a perfect storm for first time homebuyers!
First, according to statistics provided by the California Association of Realtors, the median home prices in California have declined by 41 percent in the last year alone! Nearly 6 in 10 California households can now afford an entry level home. The affordability level has nearly doubled to 59 percent since last year.
Sacramento, Fresno and Merced markets have declined to such a degree that 70 percent of households can now afford entry-level homes. Southern California’s Riverside and San Bernardino counties experienced similar declines. By contrast, the San Francisco Bay area’s distressed sales were less prevalent. The affordability factor improved by only 10 percent.
Secondly, the interest rates today are at historical lows. They are hovering in the low 5 percent range. Believe it or not there are still 100 percent loan programs available! Some of these loans don’t even require private mortgage insurance. This is huge!
Third, the sellers today are highly motivated to work with buyers. They are primarily banks, distressed home sellers or struggling homebuilders.
Fourth, the state will now give any buyer of a new home (never been lived in before) a $10,000.00 tax credit! The catch? One must live in their new purchase for 3 years. The tax credit is paid in thirds: 1/3 after year one, 1/3 after year two and the balance after year three.
That’s not all! If you are a first time buyer you get up to $8000.00 from the Federal Government and, unlike the previous $7500.00 credit, you are not required to pay it back!
As a first time homebuyer, your best bet would be to combine the Federal and state tax credit incentives and buy a new home for a combined total of $18,000.00 in tax credits! It’s a matter of Good Home $$’s and Sense!
I graduated with a master’s degree in business administration a couple of years ago. I was lucky to land a great job with a wholesale grocery outlet and I have been able to develop and maintain excellent credit.
My financial advisor said that I could repay my student loans and buy a house. He said that I needed to take advantage of the great incentives that the state and federal governments have just put into place.
As a first time buyer what would you suggest that I do? What incentives are available?
First Timer Casey
Dear Casey,
I wish that I were a first time homebuyer today. The market conditions are incredible. The perfect storm for a financial crisis has turned into a perfect storm for first time homebuyers!
First, according to statistics provided by the California Association of Realtors, the median home prices in California have declined by 41 percent in the last year alone! Nearly 6 in 10 California households can now afford an entry level home. The affordability level has nearly doubled to 59 percent since last year.
Sacramento, Fresno and Merced markets have declined to such a degree that 70 percent of households can now afford entry-level homes. Southern California’s Riverside and San Bernardino counties experienced similar declines. By contrast, the San Francisco Bay area’s distressed sales were less prevalent. The affordability factor improved by only 10 percent.
Secondly, the interest rates today are at historical lows. They are hovering in the low 5 percent range. Believe it or not there are still 100 percent loan programs available! Some of these loans don’t even require private mortgage insurance. This is huge!
Third, the sellers today are highly motivated to work with buyers. They are primarily banks, distressed home sellers or struggling homebuilders.
Fourth, the state will now give any buyer of a new home (never been lived in before) a $10,000.00 tax credit! The catch? One must live in their new purchase for 3 years. The tax credit is paid in thirds: 1/3 after year one, 1/3 after year two and the balance after year three.
That’s not all! If you are a first time buyer you get up to $8000.00 from the Federal Government and, unlike the previous $7500.00 credit, you are not required to pay it back!
As a first time homebuyer, your best bet would be to combine the Federal and state tax credit incentives and buy a new home for a combined total of $18,000.00 in tax credits! It’s a matter of Good Home $$’s and Sense!
# posted by Sue Thompson @ 3:04 PM 
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