The Obama Tax Credit days have run their long mile and now most of the buyers and sellers who participated in the incentive will have have officially crossed the finish line by June 30th, 2010. As a direct result of the Tax credit Incentive, we enjoyed a May and June with settlement-packed weeks and days. Most of those settlements included buyers who qualified for the first time home-buyer tax credit. It has been an amazing run the first part of this year for us and for the Philadelphia Housing Market. That was absolutely not the case in many other counties and States across the US according to our colleagues and friends. We count ourselves as one of the lucky ones.
Now that we have the Tax Credit days behind us, the daunting questions that still remain in our minds are:
- What will happen the rest of the year in the Philadelphia Real Estate market and nationally ?
- How can I best to position myself if I am in the market to buy or sell a home ?
- How will all of this effect me when I decide to sell in a year or 2 or 3 from now ?
The remaining days in 2010
The good news is that it is still the "spring/summer" market and mortgage rates are at historical lows so there will be that steady demand of purchasers who either did not qualify for the tax credit or for whatever reason, missed it. There is also a nice flow of investors entering the market again in hopes to pick up a few rental properties or those difficult to find "flips" from motivated sellers. The bad news is that so much of the demand in the housing market was pushed up to the first half of the year. As a result, the buyer pool, particularly the first time buyers and buyers looking under $400,000 will be much smaller and much more demanding the second half of the year.
What do you do if you are buyer or seller?
Buyers - Business as usual. You have more leverage now than you ever had! Don't be sad that you missed the Tax Credit. Get out there and e advantage of a good purchase price as there is less competition. And I know I mentioned it above but, "HELLO !" Take advantage of the historically low mortgage rates. They will not last forever.
Sellers - Your property MUST stand out amongst the crowd ! Price your property below market value. That is right! We said it ! Price your home BELOW your competition's asking price. Also, fix those imperfections, caulk those crevices, paint, clean, and present your home in the best light possible. Now more than ever this is so important. These suggestions will get your home sold faster since the buyer pool is smaller and much more demanding. And of course, hire one of the best Internet Marketers in your area as the vast majority of buyers are finding properties online.
What is going on Nationally?
Like we said, Philadelphia is amongst the lucky ones since we have a comparatively conservative response to Real Estate trends, but we share in the overall economic health of our nation. The national economy with the unemployment rate still hovering around 10 percent. There are concerns going on overseas with the debt crisis and the potential fall of the Euro. Combine that with a potential fall-off of of the Real Estate demand and it certainly raises concerns. The most immediate concerns highlight the second half of the year, especially the 4th quarter which includes the slower months of November and December. In our opinion, it is a shame that so much money was spent by the Federal Government on other programs instead of focusing more on housing which is the backbone of our economy. Even with that, the real estate market in your area will be dependent on local forces and your local economy. We think we will be walking a tight-rope in Philadelphia, but we do believe we will make it out of the woods okay and foresee 2011 being a decent year as the economic recovery continues.
How will this effect me as a homeowner in a year or 2 or 3 from now?
A Year or 2 from now - For those who purchased a home prior to the housing bubble, you will be in great shape to sell your home as long as you did not acquire more debt on top of your existing loan. Selling within a year should bring you a solid return that will make you smile. For those who purchased at the height of the market, unless you contributed to a substantial down payment, you are looking at being close to the break even point or even under water. If you can wait or rent your home, this may be a better time to consider alternative solutions.
Three years plus pan- For those who may want to sell in 3 years or more, your plan will yield the most reward. The 3-5 year plan is one we almost always recommend. Even for those people who will enter into the market as a buyer now, we suggest a 3-5 year stay in your home or investment. Each scenario is different but if we have to generalize, that is our opinion.
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