Danielle Lazier

Holiday Real Estate Slowdown Less Likely This Season

Wondering if you should sell your home this winter? Considering taking the plunge into home ownership? Not sure if you should wait for the Spring?

Typically, the winter & holiday season is a slower time for real estate. Of course, this depends on your local housing market and frankly, in large part, due to weather. Our local San Francisco real estate market (and temperate climate) isn’t usually as affected as, say, the Minnesota market but you’ll still see some seasonal drop-off.

Will this year be different?

As the Wall St. Journal reports, some experts argue that this year may be different because of the extended Home Buyer Tax Credit.

The credit caps your qualifying purchase to $800,000 or less so not all of San Francisco housing will be affected. Of course, for many home buyers, the current low interest rates are a major draw at any price point. We don’t know when they’ll go up but we do know that it is inevitable.

“House hunting usually slows down this time of year, as people put their searches on hold during the holidays.

This winter could be different, however, thanks to the extension — and expansion — of the first-time home-buyer tax credit.

“We’re going to see far more interest in the fourth quarter than we generally do because of the tax credit,” says Heather Fernandez, vice president of Trulia.com, a real-estate search engine. Traffic surged on the site on Nov. 5, the day Congress approved the credit extension, she says…”

“Interest rates are low right now, but will likely rise next year, Ms. Warren says. Higher rates will affect your monthly mortgage payments, thus the affordability of the house you are buying.

“It’s pretty universally accepted that rates will be higher next year,” she says. “What is unknown is how fast and by how much.”

Average rates on 30-year fixed-rate mortgages have been hovering around 5%. But when the Federal Reserve stops buying large amounts of mortgage-backed securities next year, interest rates could rise, Ms. Warren points out. The Fed plans to end its purchase program in March.”

Personally, I always recommend on this SF real estate blog that you make your real estate decisions based on your own life and not what the so-called experts say.

If it makes sense for you to buy a home now, go for it. Take advantage of the relatively lower home prices, the low interest rates, and maybe even the tax credit.

The same goes for those of you considering selling your home. If it makes sense in the overall picture of your life, what are you waiting for? It may be a long time before prices are back at the steroid-enhanced levels of 2005/2006.

Tags: holiday slowdown, home buyer tax credit, winter slowdown

Federal Home Buyer Tax Credit Extended and Improved! Will More SF Buyers Qualify?

The Federal Home Buyer Tax Credit has been extended and improved. This may mean that more San Francisco home buyers will qualify which is good news for both buyers and sellers.

Many clients have asked me what sort of impact the tax credit has had on our local SF real estate market. Given the income caps, I would have to say not too much of one. But now, this should be improved a little… I stress, a little, because the limitations continue to make the tax credit irrelevant for a large part of our market. For example, the limitation on the cost of a home is $800,000.

What are the major changes?

1. The timeline has been extended. You must go into contract on your home purchase before April 30, 2010 and close escrow by July 1, 2010.
2. Current homeowners now qualify. This is to help assist the “move-up” market. My readers know how great a time I believe it is to “trade-up” from your starter home into something more long-term (assuming you have relative job security and equity). (”Move-up” home buyers must have used their property as their “principal residence” for 5 out of the past 8 years.)
3. Income brackets to qualify have increased. Now, up to $125,000 for a single person and $225,000 for a married couple.
4. Purchase price limited to $800,000 or less.

For a complete 2009-NAR-Issue-Brief-Homebuyer-Tax-Credit-Changes-1104-1107.

Tags: Federal Home Buyer Tax Credit, home buyer tax credit, tax credit