It’s the year of opportunity for the first time home buyer!

Warren Buffet has often said, ” Be fearful when others are greedy. Be greedy when others are fearful.”

Buffet’s wisdom applies to real estate as much as it does to the stock market. Many buyers are sitting on the sidelines waiting for that elusive bottom of the market-fearful they will pay too much. The time to buy is now. 

Multiple factors have converged to make 2009 an advantageous time for first time home buyers to make a purchase.

1)Price declines in many markets have increased affordability.

2)Inventory in many communities is high. This affords buyers the choice of many homes as well as some leverage in negotiating a purchase price.

3)Interest rates are still historically low and should remain low throughout 2009.

4)A revised First Time Home Buyer Tax Credit was just passed as part of the stimulus package. This credit is equivalent to 10 percent of the purchase price of the home–although it’s capped at $8,000–and applies only to first-time home buyers and principal residences. But unlike an earlier $7,500 home buyer tax credit, this one does not have to be repaid. Click here to read more about this tax credit.  ACT NOW as this incentive end on December 1st (the purchase of your new home must be completed by November 30th).

5)Existing IRS tax deductions for homeowners have not changed.

6)Additional tax breaks for homeowners may be coming in 2009.

7) In some cases, it may be more affordable to own a home than to rent one.

The California Association of Realtors launched a Mortgage Protection Plan on April 2nd designed to provide peace of mind to first-time buyers who are hesitant to enter the housing market due to concerns about potential job loss, and subsequently being unable to meet their monthly mortgage obligations. Click here to read about this program.

9) As part of the recently passed state budget, California is providing a $10,000 tax credit to some buyers of new, previously unoccupied home purchases. This tax credit can be combined with the $8000 firt time home buyer tax credit. Click here for details about the $10,000 new home tax credit. Funds for this program are limited.

Once you decide to purchase a home, it is important to have the advice, support, and counsel of an experienced real estate team, who will be looking out for your best interests. There are several different types of buying opportunities on the market right now. Our team will help you craft a buying strategy and ensure you get the best possible home at the best possible price.

We’ve already helped four first time home buyers purchase a home in 2009! We’re ready to help you too!

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 Pleasanton Market in A Minute

August 2008

The topic of short Sales and foreclosures are frequently in the headlines these days. 

Lenders started foreclosure proceedings on a record number of California homeowners last quarter, the result of declining home values and the rampant spoilage of a batch of especially risky home loans made in late 2005 and 2006, a real estate information service reported.

Mortgage servicers recorded 121,341 “notices of default” during the April-through-June period. That was up 6.6% from a revised 113,809 for this year’s first quarter, and up 124.9% from 53,943 in the second-quarter of 2007, according to DataQuick Information Systems.

Foreclosure resales have emerged as a significant market factor, accounting for 40% of all California resale activity last quarter. A year ago it was 5.4%.

Let’s take a look at the numbers in the Tri-Valley Area to see how things stack up against the California State Total of 40%. 

As you can see Pleasanton’s numbers are comparatively lower than Dublin and Livermore.  A closer look at the breakdown between Pleasanton single family homes versus townhomes and condominiums indicates that the Pleasanton single family category is holding up very well.

The less REO/Short Sale activity should mean the less downward pressure on home values.  As you can see from the table below, home values in the single family category have dropped only slightly compared to the town home/condo category.

Have we hit the bottom of the market? The small increase in defaults from the first to the second quarter may indicate that we’re nearing a plateau. We won’t know until the end of the year, but it may be that some lenders are starting to prioritize workouts with homeowners instead of grinding things through the foreclosure process

One of the most far reaching housing laws in decades, the rescue law has two main objectives: to offer affordable government-backed mortgages to homeowners at risk of foreclosure, and to bolster mortgage giants Fannie Mae and Freddie Mac.

The plan also includes a larger role for the FHA, stronger regulations, new home buyer credits, permanent increases in loan limits, and grants to states to buy foreclosed properties.

Click here to read all the details of this legislation.

Dennis Kneale, currently Media and Technology Director at CNBC and previously managing editor at Forbes and an editor at the Wall Street Journal, breaks down what is happening in the market “by the numbers.”

He states that the market is going through a much needed correction, recovering from inflated home prices. He notes that 95% of mortgage holders pay on time and that only 2% of households in the US are in foreclosure.

His commentary puts a fresh spin on the the media’s propensity for doom and gloom coverage of the real estate market.

Click here to watch a video of Kneale’s commentary.

An article in the online Wall Street Journal concurs with the the article highlighted in our last post. A leading authority on the housing market, Prof. Karl Case of Wellesley College, cites housing starts as an indicator of the end of the real estate market slump. 

Click here to read the entire article.