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Saturday, October 24, 2009

Eastside Property: September home sales & agents debate the first-time buyer credit


The northern part of Silver Lake and the Mt. Washington area were some of the few communities across Southern California to show an increase in the median sales price* in September, DataQuick and the LA Times*. What's going to happen to the market if that first-time home buyer tax credit expires?

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Here's what Cheryl Johnson and other agents at Bob Taylor Properties say on the matter:

Cheryl Johnson: "Right now, our office is busy with several buyers, but I think it is a convergence of several factors: Home prices have finally moved down into a more affordable range for more people; interest rates are low (even though the loan qualifications are tighter!); and the media has stirred up a lot of interest in bank-owned foreclosed homes as "hot deals". The first time home buyer tax credit has been an added inventive on top of all that, but in most cases I don't think the tax credit alone is the driving factor."

Griff Lares (works with a lot of first time buyers): "Well, every buyer I'm working with wants that credit. Those who know they won't qualify in time are now holding off from doing anything, not even looking at homes. Others are petitioning their Senators to try and pressure the President to extend the credit."

Dan Jordinelli: "Personally I think there are many first time buyers out there who have been completely unaware of the tax credit. The new buyers I'm working with are more interested in finding the right home and less interested in the credit for closing by the end of November. It will probably shuffle itself back once the time frame has ended and the buyers will still be out there looking for that perfect deal."

Joe Elizondo: "Given the low interest rates, I am not certain losing the credit will have a negative effect. If the Fed is concerned about the deficit or inflation and starts raising rates that will affect the market. If congress increases the credit to everyone not just first time buyers, we will see a boom."

Patricia Barr: "The first time buyers credit is an extra bonus - there is an article in today's NYTimes about folks who are filing and not qualified - the congressional hearing was Wed to extend. Just think we could buy a house in Detroit that costs $6,000 and make $2,000 from the credit. Honestly it's not the sole motivation - in our area most buyers are at or above the 75,000 income limit just to qualify."

* The chart shows the change in the median sales price from September 2009 from September 2008. Only single-family homes are included.

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