The Homebuyer Tax Credit died quietly and lonely on Friday April 30th at the stroke of midnight. There were no attempts at resuscitation and even previous supporters agreed that the Credit had served its purpose and that it is time to move on and let the real estate market stand on its own.
It’s going to be difficult to measure the impact of the Credit on the Portland real estate market. I expect that we will see some increase in activity on existing short sales. Buyers wanting to make use of the Homebuyer Tax credit had to have an accepted offer in place by last Friday. The short sale time frame is so long that approval by Friday became a risky prospect months ago. With the carrot of the Credit gone, buyers may go back to looking for a deal on short sales in lieu of the $8000 (or $6500).
Mortgage rates remain low. I’ve seen printed quotes for qualified buyers at 4.375% for a 15 year fixed, low 5s for 30 years, and 5.5% for jumbo loans (your bank/broker will have to quote fees and qualifications). Unemployment is down a little. Pick a report and we can find one that counters it (and vice versa):
Ultimately, very little has changed. Now is a great time to buy for some. For sellers, an appropriately priced house will sell in any market. You’ve got to educate yourself based on your needs. The Credit was never the reason to buy a home, it was an added bonus for doing so.
One final Tax Credit consideration: those in escrow have until June 30th to close their Credit eligible transaction. Will sellers put the breaks on requested repairs? If a buyer has a newly accepted offer on a Credit eligible house, they can’t terminate the transaction and have any claim to the Credit; buy it or leave it. Flip side is that if seller is “unreasonable” the buyer walks away and the house goes back on the market. A $10,000 price reduction would only benefit the next buyer…