Did the Tax Credit Help to Sell Homes?

I am continually receiving reports and updates on real estate news. A recent study was mailed to me from Wells Fargo giving their analysis from a survey taken in September 2009.

The awareness factor indicated 94% of first-time homebuyers knew f the credit and 72% of reners intending to purchase knew of the credit. 56% of actual homebuyers said it was the key factor in their decision. However, 74% said low home prices were the main reason to purchase and 66% attributed their decision to low interest rates. When you add all those factors you get over 100% so I assume it was multiple choice. The three factors were crutial in helping buyers to buy.

When asking renters who intended to purchase within the next six months, 72% said the tax credit were a key factor (but not only factor), 84% said low home prices were the reason and 74% said it was due to low interest rates.

Single family homes in the North Orange County area when listed below $500,000 are still getting lots of activity and multiple offers are there. I've had a couple of clients trying to buy properties in that range and we are still running into the same problem--investors with all cash naturally get first consideration and offers are coming in higher than asking price.

The forecast is that it will be another year or two before distress properties are off the market. We have to remember with buyers purchasing all these lower priced distress properties that we have no move-up buyers to purchase homes up to a million. Those are the price ranges that are really hurting.

I recently did an analysis for a homeowner in Fullerton looking up to $700,000 and half of the properties on the market were still Short Sales and bank owned properties. We are being told the bnaks have finally hired staff that can better process the Short Sales. Theya re still risky and you can sit on a Short Sale for months not knowing if the bank will consider the offer. Agents usually have it so low that you naturally get a buyer trying to buy but the bank may not be willing to take such a huge hit. No one is happy.

I am very thankful the last three I sold in November were equity sales and we didn't have to go through that process.

Loan modifications are another topic I won't go into. Homeowners are going months trying to negotiate not knowing if the banks will accept a compromise. As with Short Sales, some are justified and others are just looking for an excuse to get out.

It will be another 2-3 years and many getting out of distressed situations will be in a better financial position to purchase homes once again. That is not that far off and the cycle that has been down will go up.