Would it benefit me more to wait until July to try and buy a home.. Like everyone else, I wanted to buy soon to get the Tax Credit, however, every

Asked by Dorian, Palmdale, CA Thu Mar 25, 2010

house that I have looked at and really liked have been short sales(Most of them) or they have 10 plus bids on them.. Do you think that their will be less competition come July because of the end of the tax credit, or is the market slowly turning away from a buyers market and I will be in the same situation no matter what..

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Michele Hunt, Agent, Palmdale, CA
Thu Mar 25, 2010
Hello Dorian,

I know this seems to fly in the face of what everyone believes right now, but this is NOT a buyer's market...it is really a seller's market. In a buyer's market, the buyer can wheel and deal because the seller doesn't have any other options than to consider their offer. As you well know, this is certainly not the case. I know it seems odd to say that since so many people have lost their equity and are threatened with foreclosure; the truth of the matter is that people think it is a buyer's market because the current price of real estate has fallen so far below what it was worth 4-5 years ago that EVERYTHING is a great deal right now. If you are in a position to buy right now, you know what a great deal you are getting IF you can actually get the deal! Here in the Antelope Valley it is quite common to see homes sell at a higher price than listed.

As far as your question goes, nobody really knows what July will bring. I can tell you that it has been my experience that July is a slow market because many people are on vacation and are not actively looking to buy. It usually begins to pick up again after school starts, but that can always change...and it is really anybody's guess.

One thing I can say for sure is that the month of April is going to be highly competitive because of the tax credit expiration AND because of the new HAMP/HAFA guidelines effective April 5th.

I can also tell you that I have been successfully closing short sales since February, 2007, and that I am suddenly seeing an increased rise in the amount of Notice of Trustee's Sales (foreclosure auction notices) that are being filed. I deal primarily with short sales and have several listings in process of negotiation...I have been spending the last 4-5 weeks postponing foreclosures, which is something I haven't had to do on a regular basis since early 2008. There is alot of movement right now, and it is anybody's guess to see where we finally land.

I would highly recommend that you continue your search because this is a crazy market and crazy things can (and will) happen!

Sincerely,
Michele M. Hunt, GRI, CRS, SFR, CDRS
Broker Associate
Short Sale and Foreclosure Resource, Certified Default Resolution Specialist-Gold Member
1998 REALTOR of the Year
DRE #00922428
Realty Executives Platinum
Palmdale
Web Reference:  http://www.MicheleHunt.com
2 votes
Dan Chase, Home Buyer, Texas City, TX
Thu Mar 25, 2010
First, see if buying makes more sense financially... (then we will get to the rest)
http://www.trulia.com/blog/dan_chase/2010/01/does_it_make_mo…

Ok, you think buying makes more sense. The question is when. Below are some blogs I wrote that suggest that waiting until a bit later will pay off.

10 reasons to wait to buy a house.
http://www.trulia.com/blog/dan_chase/2010/01/10_valid_reason…
Do low interest rates make it a better or worse time to buy? (they will be going up soon)
http://www.trulia.com/blog/dan_chase/2010/01/do_low_interest…
What will (or could) happen when the free $8k goes away.
http://www.trulia.com/blog/dan_chase/2010/01/what_will_or_co…

Finally, things I would want to find out about any property before I bought a house. It could save you a lot of problems later on.
http://www.trulia.com/blog/dan_chase/2009/11/questions_i_wou…
1 vote
Ramin Lavi, , Los Angeles, CA
Thu Mar 25, 2010
Hi Dorian, great question. I represent many listings, a couple in Palmdale as well and yes there are multiple buyers for each home I list. To address the main concern, with or without the tax credit there will still be multiple bids on these homes. Most of the buyers in todays market are investors which care for the long term and not so much the short term credit. I say keep making offers, eventually one will fall through. Have your agent be persistent as well. People can predict the housing market, it's economics. The market will continue to drop so don't feel rushed. Feel free to call me if you want to view some of my listings in Palmdale.

Ramin Lavi
rlavi@eqemail.com
213-802-1232
1 vote
Shel-lee Dav…, Agent, Rolling Hills Estates, CA
Thu Mar 25, 2010
Dorian:

The Federal tax credit may be set to expire soon (you actually have to be under contract by April 30 to qualify). However, in California, that will now be replaced with the new State 1st Time Homebuyer credit, effective for homes purchased after May 1, 2010. And, there is a good possibility that the Feds will, once again, extend the Federal tax credit. Because of this, the market may not "cooling off" any time soon.

Don't give up looking. It can be frustrating to be one in a stack of 10 offers. Yet even in that stack you have an equal chance of being the accepted offer. Just make sure that your realtor helps you write a strong offer and then includes a cover letter addressing the merits of both you, the buyer, and the offer you are presenting. There are no silver bullets, but there is one thing you know for sure. If you do not write an offer you have a 0% chance of getting the property. Dare to Dream.

Shel-lee Davis, CDPE
Your Real Estate Consultant for Life
RE/MAX Palos Verdes Realty
http://shel-lee.listingbook.com
0 votes
Dan Chase, Home Buyer, Texas City, TX
Thu Mar 25, 2010
A lot of people are using the free $8k as a down payment. (Thanks for the "gift" uncle, pay you back when I get the check)

Greed is making people buy anything just so they can get free money. Their focus is on the prize, not the house they are getting.

Once the free money disappears yes, I expect a lot less activity in large part because of fewer qualified buyers around. I could be wrong. I am waiting until fall to really look myself.
0 votes
Emelia Sanch…, , Ontario, CA
Thu Mar 25, 2010
Dorian,

For the tax credit you must be under contract by April 30th and it needs to close prior to June 30th.

It has not been a buyers market in California since the end of 2008 the lack of inventory makes it a sellers market. If you are ready to buy then just keep looking and go ahead and offer on the short sales because that is most of the inventory out there. The government once again is stepping in and trying to assist the distressed homeowners. 1st HAMP (Home Affordable Modification Program) and now another program HAFA (Home Affordable Foreclosure Alternatives). The buzz is that if you don't qualify for the HAMP program then the bank offers the homeowner HAFA and there is a timeline that the homeowner has to reply its acceptance as well as the bank. This should shave months off the short sale process. Who knows HAMP was not that successful so maybe HAFA will not be either.

As for less competition: as long as the supply is low and the demand is high it will be the same thing come July. In previous years this is when there is more activity because the children are out school and it is the best time if you are going make the move to enroll them in a new school.

I wish you luck in your home search and know that you are not the only frustrated buyer, seller, agent, broker out there.
0 votes
Trisha provi…, Agent, Palmdale, CA
Thu Mar 25, 2010
That is hard to say, only you know the answer to that. If you want to buy now to get the tax credit than just be aggresive in your offers and have a realtor that is willing to help you get the home you want.
With the market the way it is I think we only going to continue to see more short sales and foreclosure, So its going to be a buyers market for a while.
I am Short sale and Foreclosure Certified so if you need any help with purchasing a home please give me a call.
Trisha Provinge REALTOR, SFR
DRL #01870214
John Hengel Real Estate
Trishaprovinge@yahoo.com
Cell: 661-236-8041
Fax: 661-480-5649
0 votes
Lady Valerie…, , Lancaster, CA
Thu Mar 25, 2010
I recommend buying now. The tax credit is a gaurentee.
Noone can truely predict the real estate market, what it will be in July or anytime for that matter.
Jennifer Anderson
Century 21 Doug Anderson Lancaster CA
Web Reference:  http://www.avhomeinfo.com
0 votes
Emily Knell, Agent, Huntington Beach, CA
Thu Mar 25, 2010
I personally do not believe that the ending of the tax credit is going to help. There will be more short sales since Obama's HAMP plan has only helped 170,000 homeowners vs. the 4,000,000 that Obama stated in Feb. 2009 would help.

There will be more REO properties coming on the market too, as the banks keep releasing their shadow inventory.

Even though there are 10 bids on a house, there's still the possibility that you could get the house, you need to stand out, more than just another 10pgs being faxed over to the listing agent. Write a letter about yourself and submit along with your offer, attach a photo. Yes, that's a little odd, but that's how you stand out amongst the pile.

EmilyKnell1@yahoo.com
562-430-3053 cell
0 votes
Anna M Brocco, Agent, Williston Park, NY
Thu Mar 25, 2010
Unfortunately a decision only you can make--If you are ready to buy and need to purchase, buy now and be a little more aggressive in bidding--in addition to the tax credit, interest rates are still very good--and who knows where they will be down the road. If you are not in any rush to buy, buy when you are ready.
0 votes
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