With the housing recovery in full force, the game is changing for those looking to enter the market. Here’s what you need to know to get the most out of the market as it heats up. What has changed While foreclosures will continue to be a part of the market going forward, they have reduced in number and impact. At the same time, continued speculation about a steady and sustained rise in interest rates is starting to influence potential buyers. Finally, the federal home buyer tax credit just expired. This happened at the same time the new California credit went into effect. So, now we have entered an environment where homes in California are partially subsidized by the state government, which is an advantage that does not exist for most other regional housing markets.
Buyers should If you have been thinking about buying, now is the time to make your move. The California credit is likely to expire much quicker than most people think, since it will hit its cap well before it hits the expiration date. To take advantage of up to $10,000 in tax credits, buyers should start the process now. Additionally, the housing affordability index (the index that measures how many people can afford to own a home under current market conditions) is at its highest point in years. If jobs begin to come back into the economy, the market could be
flooded with new buyers, sending prices upward.
Sellers should If you have been thinking about selling, there is a small window of opportunity that promises to be very lucrative for savvy sellers. Putting your home on the market now could put you in a perfect position
to take advantage of the market right as it begins to heat up. As stated above, buyers are beginning to come back to the market, and the state homebuyer credit promises to accelerate that trend. Most importantly, waiting too long could prove a costly move. Once the homebuyer credit expires and interest rates spike, all bets are off.