I’ve encountered the question recently, what will values do after the tax credit ends? Fact of the matter is, I don’t know. I don’t believe this tax credit has really done that much to begin with. Will it make or break values after it ends, time will tell. I think they’re many buyers who have the cash and are willing to gamble that values will drop.
I can’t say what I would do if I was looking for my first home at the moment. On one hand values could drop which could increase your buying power, on the other it may not make any difference and you’ll miss out on $8,000 credit. For example, based on a $100,000 home, for values to drop 8% or more, even at the worst time in our local economy I don’t think values dropped that much, in the under $150,000 range. Your closing costs would be about the same regardless, you may end up saving a thousand at most on overall cost.
Based on normal appreciation we’ve experienced in Lancaster County, you can count on about 3-5% over 5-10 years. So do the math, is it worth taking that cash out of pocket, or not getting the tax credit.
Showing activity has increased and properties going pending are increasing. It’s believed to be the $8000 motivating people to push forward before this ends. As of today I have heard nothing leading us to believe that this credit will extend. People have asked what will values and activity do after these credits on the table end (if they do). People have asked will values sustain or will they decrease with less demand? My answer, I’m not sure. There will always be a need to buy and sell real estate, people relocate, get fired, get hired, death and not to forget family’s increase and decrease in size every day. Real Estate will undoubtedly come back, but probably not until after a few more years of decreasing values and bumps along the way. They’re already talks of more waves of foreclosures, which will only lesson already uneasy values.
On a positive note, this will provide great opportunities to invest in real estate. Invest in a home or an income producing property right here in Lancaster County. I have no doubt there will be some great deals on real estate yet to come.
I could go on all day on why it’s a “good idea” to get this tax credit. Or why you should “buy your home sooner than later.” Don’t take my word for it, just read my five reasons. If you miss it, that’s on you!
You can qualify for almost (in most cases for homes under $170,000) all of your closing costs to be covered. (For some of you who didn’t catch that, the government is paying for your home’s closing costs!)
They’re some great deals at the moment in Lancaster County Pa. Whether you’re buying a mansion or a row home, you have some real bargaining power at the moment. We have a lot on the market, which means you are in a buyers market.
When you buy a home, you stimulate the local economy, contractors, builders, painters, plumbers, grocery stores, gas stations, jobs and more. You are part of the recovery.
You can work with me, I’ll walk you through everything. If you have a question, I’ll find the answer.
Don’t make me think of five reasons, anyone of these is good enough!
