It’s probably safe to say “there’s never been a more interesting time” to be a real estate agent than right now.
Anyone who has been helping people buy and sell homes for even a few years has experienced good times and bad. Just three years ago, homes were selling at a fairly fast pace and at nice profits for the homeowners. That trend took a not-so-pretty turn last year when the U.S. economy dipped into a recession. But, thanks to almost historically low interest rates and a federal government stimulus plan aimed at first-time homebuyers, that trend is looking much better.
As a Realtor with Woods Bros Realty, I can tell you first-hand the current $8,000 federal tax credit aimed at first-time homebuyers has created quite a stir. Most of the Realtors I talk to are working with one, two, three or more “new” buyers. These are buyers who most likely would not be looking for a new home right now if it were not for the double-punch of low interest rates and the tax credit.
Lincoln homes listed for sale in the $75,000 to $150,000 price range are getting increased attention from prospective buyers. Of those homes, many are selling fast! Many “first-time home buyers” (anyone who hasn’t owned a home in three years) are also looking above the $150,000 range; some even above the $200,000 range.
There are many ways to look at and analyze those numbers. As one example, I studied the numbers for home sales in the Midlands MLS (Multiple Listing Service) area 32. That area is generally between S. 27th Street and S. 56th street and Van Dorn and Highway 2. It includes such neighborhoods as the Country Club, Antelope Park, South Gate and Union College. In this particular area of Lincoln there are currently 89 homes listed for sale (as of 3/25/09) on the Midlands MLS. The prices range from $55,000 to $1,350,000 with a median list price of $137,900.
There are some very positive things happening in this area, especially compared with the same time last year. In February 2008, there were only 5 homes sold in area 32 (on the Midlands MLS; this does not include any homes that were not represented by a listing agent). The median sales price of those homes was $110,060. In February of 2009, just last month, there were 14 homes sold in area 32, at a median sales price of $138,500. That is about a 25 percent increase in the median sales price. We fared very well, and much better than in other parts of the country.
To take a broader look, the National Association of Realtors reports that in the Midwest region of the country, homes sales in February 2009 were down about 14 percent from February 2008. And, the median sales price fell almost 8 percent to $131,000. That’s far better, however, than what happened in the West region, where the median home price in February 2009 was $204,600 or 30 percent below the median in February 2008. (Nationally the median sales price for a home fell 15.5% in February 2009 from a year earlier to $165,400).
It does seem this is going to be a much brighter year for most people looking to buy or sell a home. For the home buyer, interest rates continue to stay very low. That means they can afford a higher priced home. (The catch, however, is that loan requirements are tighter and home buyers are being asked to bring a down payment of at least 3.5 percent compared with the 100 percent financing which got so many people into trouble in recent years).
The second bright note, the $8,000 tax credit, is a great incentive for people to buy. That money can be used to pay off debt, to put into savings, or–as the government is hoping–to be spent on things such as a new car, or furniture, or hiring someone to paint the house. According to the National Association of Realtors, first-time homebuyers accounted for one half of all home sales across the country last month. I wouldn’t be surprised if that statistic is even higher for the month of March as more seasonal home buyers enter the market.
Unfortunately, a higher percentage of the homes that are selling are vacant and have been for a while. For one reason or another, job relocations being one primary factor, many people had to make moves into new homes before their last one was sold. Some of these people have been making double mortgage payments for quite some time. Now that those vacant homes are selling, life may soon be getting easier for those homeowners too. If so, that could be a winning situation for both buyers and sellers in today’s real estate market.