2009 Housing Market Ends on a High Note!

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 As 2009 comes to a close, we want to share plenty of good news with you on the residential real estate front.

 

First, we are thrilled to see the federal government pass the extension and the enhancements to the home buyer’s tax credit.  This will significantly help the real estate market lead the economy into stronger times.  To summarize the new program:
  • First-time buyers are eligible for up to an $8,000 credit and now have until April 30, 2010 to be under contract (and close by June 30, 2010).
  • Repeat buyers who have lived in their current home for at least five consecutive years of the past eight years are eligible for a tax credit up to $6,500.
  • Higher income limits – Both first-timers and repeat buyers may purchase a principal residence up to $800,000. Income limits to qualify have been increased to $125,000 for single tax filers and $225,000 for joint filers.
  • Credits are effective NOW – The new legislation replaces the former tax credit scheduled to expire November 30.
  • Credits do not need to be repaid – The credits for both first-time buyers and repeat buyers are true credits and do not need to be repaid unless the home is sold within three years of purchase. The credits are claimed on the buyer’s federal income tax return filed for the year they purchase their home.
  • Interest rates are still historically low and selection is excellent. The rates are likely to rise in March when the Feds will pull back on the purchase of mortgage-based securities. Act now to lock in those low rates.
In 2009, we saw a true benefit from the previous “First time buyer’s tax credit” which this program has replaced and enhanced.  We are very optimistic the new program will prove to spur even more sales activity – a true catalyst to economic improvement. Additionally, the Lake Norman market has continued to show signs of improvement.  While 2009 activity will end the year behind 2008, the second half of 2009 was stronger than 2008.  We expect this trend to continue and my forecast is for 2010 to be markedly improved over 2009.  There will be one critical impact in 2010 – interest rates are expected to rise in the second quarter as the Fed has indicated an intention to reduce their financial support for mortgage-backed securities which are keeping rates artificially low to spur economic growth.  The time to buy or trade residential real estate will never be better than now through April 30, 2010. Lastly, I expect prices to stabilize somewhat.  While foreclosure activity remains high, the demand will improve and that inventory will be absorbed.  We do not see prices rebounding to previous highs in the near future. We look forward to assisting you with your real estate needs.  Feel free to call us or visit our website at www.LeeAnnMiller.com  where you will find more than 130,000 homes searchable throughout the Carolinas. Best wishes for a very happy holiday season and New Year.

         The Lee Ann Miller Team

 

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