Spending $20K to get an $8K credit???
1. When the $7500 loan ran out, it was replaced by the even more
lucrative $8k gift. who knows if they offer something better next?
In most starter home areas, there is now fierce competition for homes.
Multiple bidders, and bidding over list price are common, even $20K and
more over list price. Prices in some areas have quickly jumped by $20K
and more. If paying $20K more to get the $8k credit seems like a good
deal, you might want to brush up on your math.
from NAR are that 1/3 of all first time buyers are buying due to the
credit. If correct, this means that we will have a 30% drop in demand
immediately when the credit expires. Furthermore, even among those who
did not buy directly for the credit, a substantial percent will have
hurried their purchase in order to beat the deadline. There will be
little incentive to hurry. a 50% drop in buyer demand does not seem out
of the realm of likely outcomes (and winter is always slower anyways)
the number of homes in foreclosure, and/or delinquent on their
mortgages has continued to climb. Short of just letting everyone who
can't afford their homes keep them, it seems clear that supply will be
coming eventually. [In phoenix, we had 23,000 homes in foreclosure in
january, today we have over 50,000. The local mls only has 39,000 homes
for sale, so any clearing out of the pending foreclosures will change
the supply of homes by 50% at least, even if nobody else falls behind
on their mortgage]
racing to buy today, and you might actually
have done better by losing the credit, and buying a much cheaper home
in 6 to 12 months.