After the Frenzy
Federal tax credits were given for individuals purchasing homes in 2009, to enhance the buying behavior of people and to improve the home market. These credits accounted to around $6500 for move-up buyers and nearly $8000 for the first-time buyers. To become eligible for these credits, the contract for the purchase has to be signed on or before April 30 and closing must be around June 30.
Owing to these, a significant increase in closings was observed in April 2009. Nevertheless, local employment levels and number of foreclosures still to occur served to be the major challenges, since unemployment rates hit their lowest of 10.2% and new filings increased 13.5% in 2009. But these data being higher than the last year’s proved the slow recovery of market. Hence the tax credits, as expected, are improving the market.
Bargain Buys
Though the market suffered a lot, some buyers succeeded in making savings, not small but in fact huge. This is especially owing to the lenders messing up their sales of foreclosed homes in addition to distressed properties, most of which were gobbled up by the likes of new buyers of Phoenix investment property, or the like. However, the home prices are likely to regain their old composure in 15-18 months from now based on their US location. There will be no extreme discount offers on homes and short selling in the near future. Tax credits have in fact fulfilled their job considerably.
Tax Savings
In spite of tax credits being available only for a very short period of time and it has worked wonders even in 2010, it is early to determine the number of purchasers who used them. People even deemed the credits to carry more value owing to their ability to cover a whole down payment or a remodeling project. Most individuals were ready to take up the risk of purchasing homes, especially due to the tax credits.
Are we in the Clear?The period from January to April of 2009, in comparison to 2008, has experienced a 27% rise in the Southwest US and 57% rise in popular areas around Phoenix for recent house construction permits. The mean home prices had a significant raise, signifying the improving market conditions. In spite of more downfalls in 2010, the nationwide market is likely to recover slowly and regain stability by 2012.
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