Marco Island, FL. It’s the best time in eight years for buyers to get into the property market according to the latest sales statistics. This has taken housing affordability in the US to levels not seen since 2001. A combination of depressed housing prices, record low interest rates and the government home buyer’s credit has recently improved sales for single family homes.
Distressed properties, such as foreclosures accounted for just over half of all transactions in March. Current average home prices in historically exclusive areas such as Southwest Florida are dramatically down, the average sale price of a single family home last month was $ 486,418 compared to $ 1,039,786 in February 2005.
The government is giving a tax credit of up to $ 8,000 for first-time homebuyers who purchase a home before December 1, 2009. To qualify, the buyer must not have owned a property in the three years prior to purchase.
Long-term mortgage rates have hit record lows recently with 30 year fixed rate at 4.79% and 15 year fixed rate at 4.51%
The recent incentives have given home buyers a break, which might have otherwise have put off the American Dream. Many are seeking the cheapest properties on the market, which in boom areas, is comprised primarily of foreclosures, short sales, bank-owned properties and distressed sellers. In addition, the inventory levels are dropping, with the nationwide inventory at 9.8 months.
Bronwyn Jones from Independent Brokers Realty on Marco Island has seen a dramatic increase in new buyers since January. “We have had at least a 50% increase in clients interested in foreclosures, especially bank-owned. Interest in condos have dropped, due to the difficulty in obtaining financing with the new lending restrictions.” Many first time buyers are turning to other options in order to own a home “Seller financing is a popular option, as well as some bank-owned foreclosures are offering excellent low rates for financing”
First time home buyers who are taking advantage of the buyers market are getting younger too. 45% of buyers purchasing a primary residence in 2008 were under the age of 35, according to a recent survey by the National Association of Realtors.
This is all positive news for economy but, be warned, if buyers have not purchased anything within the next year, they will probably wish they had.