This morning on my guest spot as the real estate expert on KXL-AM I spoke about my instinct that there is a coming storm for first time buyers or anyone buying in the under $300,000 price range.
1. I think the first time home buyer tax credit will NOT be extended. Right now you have to be in title by December 1st, 2009 [that’s this year folks!]. Considering loans are taking longer to fund you’re looking at 45 days on average from acceptance to closing. That math means that you need to find your place by the first week or October – that’s coming up very quickly.
2. Inventory under $300,000 and especially under $250,000 is already around 2 months in Portland. For perspective, 2 months of inventory is an absolute sellers market and this is the amount of inventory we had at the height of the real estate hysteria. So if you want to know what it’s like to be a first time buyer think back to multiple offers on the first weekend. It just happened to 3 of my clients in the last week. I’m very comfortable with multiple offers and I can almost always help my clients win them if they really want the home.
3. Interest rates this time last year were roughly 6.5%, right now they’re 5.4% – that means you have 10% more buying power right now. Interest rates will not likely go any lower but they certainly can go up. For every one percent interest rates go up you lose 10% of your buying power.
We are in the midst of an unbelievable time of opportunity. If you or anyone you know is thinking of buying please let me know so I can help you find a home before this opportunity passes.