Northern Michigan Real Estate: How the first time home buyer credit helped the market

How has the first time home buyer tax credit helped the market?  I myself think it has been one of the Democrats best success stories.  Obama shined with that one.  I know Republicans and tea party members rabidly hate him,   BUT>>>>>>.  The first time home buyer tax credit did stabilze the housing values in many real estate markets across the country or at least slowed the downward spiral.  I think if you ask any real estate professional you will hear that the tax credit did bring a large number of buyers into the market.  The tax credit created demand.  And I believe the demand in the Metro Detroit housing market was enough to temporarily stabilize the home values.

A year ago we had inventories of homes that ranged from 6 months to 2 years.  Gone is that inventory.  Good houses are being sold quickly.  Sometimes in days.  It is not unusual for a house to only last 2 weeks to under a month.  A year or so ago we wouldn't take a listing for less than a 6 or 9 month period.  We would not think of accepting an offer with a contingency to sell.  Now those offers are being accepted.  The market has shifted because of the first time home buyer tax credit.  The market has improved.

Before the first time home buyer tax credit we were on a major slide of home prices.  The tax credit brought investors and first time home buyers into the market.  In the last year it was not unusual to see multiple bids and homes going over list price.  All due to first time home buyers and the tax credit.  Sure the higher priced homes were not affected but the homes under $250,000 range were.

Investors also jumped into the market.  They could buy and then fix up homes to flip to first time home buyers.  That also helped the market.

As for what will happen  after it ends I honestly don't know.  I do think demand is already dropping off.  We are exhausting the first time home buyer pool.  Now we are getting bad credit people applying.  There are less qualified buyers out there right now.  So hopefully home values won't drop after the first time home buyers leave the market because the credit expired.   Hopefully the length of time houses will be on the market won't change.

I think the economy is stabilizing somewhat.  People have accepted we are in this period for the long haul.  Americans are spending, yes but at a slower pace.  But they are spending.  We are moving forward in life.  Our standard of living is going to come down.  We are not going to be able to wastefully spend like we did for years.

The roaring 90's are over.  We lived thru it.  The age of using your house as a bank is over.  It's time to pay up or pay the piper as they say.  We as real estate agents and home owners have to accept that prices are going to be much lower for years to come.  That we may have to stay in our homes for years to come because we are upside down.  The market has changed and accepting it, adapting to it will help us survive.

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My quote of the day is:

It is not the strongest of the species that survive, nor the most intelligent, but the one most responsive to change.  ~Author unknown 

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May 2010 be one of the best years of your life! 

Russ Ravary your Metro Detroit realtor

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