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Help for first time home buyers in today's market

by Wayne Wargo (PenWay.org)

Are you one of those interested in buying your first home in the current real estate market that seems to be turning around?

The U.S. housing market appears to be on the verge of emerging from the worst real estate market in three years. The current real estate market is offering many challenges not seen in the previous seller's market. Now that the presidential election is over, we have a new administration. Since it is too early to tell what their track records will be like, it is just too difficult to predict what the future holds.

Unemployment, the economy, short sales and foreclosures have forced sellers to lower their prices. Average time on the market from listing to contract is more than 120 days. The nation's inventory of unsold homes remained at 9.7 months in February 2009. A six-month supply is considered balanced between supply and demand.

It has been said that the current real estate market is at its absorption stage where investors should be encouraged to buy, especially cheap houses for sale to reduce foreclosed homes.

First-time homebuyers make up 40% of the real estate market. Renting several years ago was thought of as preposterous due to the vibrant climate of purchasing a home. The government's $8,000 tax credit incentive for first-time buyers should be an effective marketing tool and help those who want to purchase their first home. The credit - which expires on November 30, 2009 - can be claimed on the purchaser's tax return and does not require repayment unless the home is resold within three years.

Many experts are predicting that the recession will be over in 6-9 months, with some even saying that by year-end, the future will be brighter.

Even celebrities have problems. As an incentive to selling their homes or mansions, some are even including all the furniture and trimmings. Some are even throwing in their Mazzerati, Rolls Royce, Ferrari or Bentley!

Consumer confidence is up as of the end of May 2009. Sales of single-family homes, condos, town homes and co-operatives are up about 3% as of the end of April 2009. Rising sales and new construction have also boosted consumer confidence. Low mortgage rates are around 4.8% for a fixed 30-year loan while a 15-year loan rate is around 4.4. And, of course, the $8,000 credit for first-time buyers will help.

Nationally, home sale statistics are as follows: Northeast - up 12% West - up 3.5% South - up 2% Midwest - down 2%

Knowing the market is the first step that you should take when you look to buy a house. There is not typically a more important purchase in people's lives than the purchase of their home.

For those interested, what about checking on homes that are in foreclosure, make a deal with the owners to buy their home, and then rent them back to the previous homeowner? You may even include in this transaction to sell the property back to homeowner whenever the real estate market improves.

Another possibility is selling the home yourself, save the commission and use this savings to relocate, add to your nest egg, set up a grandchild's college fund, etc.

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Help for first time home buyers in today's market