In the State of California 47 percent of home sales went to first time home buyers. This is the highest percentage since 1995.
Slightly more than half of the home sales were distressed properties- foreclosures and homes that are upside down. (short sales)
The latest news blurb calls for a “possible double dip” in home sales based upon the fact that the number of pending home sale was down in November. Less pending home sales around the holidays is normal. The buyers are finished with the holidays, interest rates are still low, and homes continue to sell very quickly. The news of a “possible double dip” is absurd. Homes priced competitively along side the foreclosure homes sell in less that thirty days. Homes go pending in as few as 5 days. The demand is strong and price point homes sell quickly to first time home buyers and to real estate investors.
First time home buyers made up nearly 50 percent of all home sales transactions in November. Supposedly first time home buyers are taking advantage of the first time home buyer program. Perhaps buyers are more inspired by low interest rates between 5 and 6 percent or maybe first time home buyer are motivated by foreclosure bargains. In any case, sales were up 44 percent from last year. Congress has extended the deadline for first time home buyer tax credit and offered a 6500 dollar tax credit for existing home owners that want to upgrade. The volume of foreclosure priced at a discount is enough to get most buyers off the couch and out and about to explore opportunity in home buying.
Right now is a great time to buy home in El Dorado County. Federal government programs aimed at propping up the real estate market have incentivized buyers to buy. The deadline for the first time buyer tax credit for up to 8000 dollars is December 1st, 2009. This means buyers really need to be in a contract on a home by October 25 to have a shot at meeting the dead line. Most escrows take at least 30 days, so a surge of sales is likely to occur in the next two months, especially since 30 year fixed interest rates are so low.
Aside from the First-time Home Buyers tax incentive, several laws have been passed that have radically changed how home values are determined.
Appraisals must be order through an appraisal management company (AMC). This law was design to prevent Realtors and loan officers from pressuring appraisers into inflating the value of a home so that financing requirements could be met (loan to value ratios) . This law has contributed to the accelerated fall in real estate prices.
Appraisers are no longer asked to reconsider the value that they have come up with, even in some situation when they should. Some appraisers are dispatched to do work in areas that they are not familiar with, and so accuracy of valuations sometimes come in low.
Appraisers no longer rely on realtors or loan officer to call upon their services, and so there is little recourse if and appraisal in sloppy or inaccurate. Appraisers are being paid less for their reports because AMC agencies take a fee for dispatching appraisers. Also, the price has gone up for consumer who pays for the appraisal from 300 to 500 dollars. The AMC companies generally slow the process down while driving prices up. Appraisers have made major adjustments in how they run their business, and how much they earn.
These new appraisal laws and the first-time buyers tax incentive make it a great time to buy a home in El Dorado County. Start your home search today on our MLS Search Page.
