Although the economic outlook is grim to many, there is always reason to smile. For one thing, there are many incentives to entice first time buyers to take a leap into home ownership. As part of the Housing and Economic Recovery Act of 2008, a first time home buyer tax credit is available in the amount of $7,500. At first glance it seems as though the government will put $7,500 in your pocket toward the purchase of your new home. In reality what it means is that the new homeowner is eligible to deduct $7,500 from their Federal Tax Liability. For example, you file your ‘normal’ tax return and find that you owe $2,000 in taxes. With this credit, your tax liability could be lowered by $7,500—which means, you instead get a $5,500 tax REFUND check from IRS. No too shabby. For more information visit federalhousingtaxcredit.com.
Think of the choices that are available, it's a dream come true for many. The young buyers' I am working with are overwhelmed with options! The National Association of Realtors just reported that there is a 11.2 months' supply of previously owned homes for sale last month, compared to about a six month supply that usually accompanies a healthy housing market. This means if not one more home went on the market it would take 11.2 months for the inventory to be absorbed; our national absorption rate. Please note this number varies from city to city or neighborhood to neighborhood.
If you are fortunate enough not to be in the hardest hit areas like Miami or Phoenix, there has been modest gains in home prices in some markets including major cities, like Denver, Atlanta & Chicago and in the thick of the summer, that is good news!