Today's Topics:- Market Update: The Cromford Report 3/3/09
- $8,000 Tax Credit for New Home Purchases
- Getting Pre-Qualified for a Mortgage
Market Update: The Cromford Report 3/3/09
The current greater Phoenix market is doing much better than media reports would lead you to believe. For example, if you look at the chart below, you will see that there are less Active Listings and more Pending Listings (homes with contracts) and Closed Contracts than last month, the previous month, and last year. Currently, there is an 8.8 month supply of homes, compared to an 11 month supply last month and a 16.6 month supply a year ago.
The green arrows indicate good news... the red, not so good.
Sales volume rebounded as expected in February and is now nearly 70% higher than at the same time last year. Pending listings are extremely high, with the year-on-year growth setting an all time record of 89.8%. Active listings are falling steadily. What’s not to like about this picture? Surprisingly, Market Distress peaked in February and is now starting to fall. All these indicate the market is improving and is now very much in recovery mode. However pricing will almost certainly be the last indicator to turn round, and there is no trace of a bottom to be found in the monthly sales $/SF or median sales price numbers, with both of these showing 50% drop in the last 2 years. However average asking price $/SF has dropped less than 20%.
The main positive action is concentrated in the very low and low priced segments of the market. The higher priced sections of the market are still suffering from low demand and high inventory with only small signs of improvement. The number of active REO listings is falling quite sharply and normal active listings are also down, but short sales and pre-foreclosures are up slightly.
In its efforts to stimulate the economy and revive the housing market, Congress has enacted legislation providing a tax credit of up to $8,000 for first-time home buyers. "First-time" doesn't necessarily mean you've never owned a house before. In fact, for the purpose of this tax credit, you are considered a first-time buyer if you (or your spouse) haven't owned your own home during the three-year period prior to the purchase. In brief,
- The tax credit does not have to be repaid.
- The tax credit is equal to 10 percent of the home’s purchase price up to a maximum of $8,000.
- The credit is available for homes purchased on or after January 1, 2009 and before December 1, 2009.
- Single taxpayers with incomes up to $75,000 and married couples with incomes up to $150,000 qualify for the full tax credit.
While there are income and other restrictions on who can receive this tax credit, it's a GREAT DEAL if you qualify and you should take the time to check it out. Visit the site below for in-depth information on the tax credit.
http://www.federalhousingtaxcredit.com/2009/home2.html
Getting Pre-Qualified for a Mortgage
If you're starting to think that this is the right time to buy a home, the first thing you want to do is contact a lender to get pre-qualified for a loan. This will give you an idea of how much of a loan you can afford and what price range you should be considering. If you don't have a lender that you are currently working with, you can find the names of several great loan officers at my website.
Today it is common practice to present a Loan Status Report (LSR) with an offer. The LSR is the document you will receive when you get pre-qualified for a loan.
If you are one of those lucky folks who wants to buy a home with cash, remember that you will need to show "proof of funds" when making an offer.
