Some Home Buyers are making a purchase just because they can get $8000. Is this a good enough reason to buy a home? There are many benefits of home ownership and last time I checked a one-time $8000 bribe was not one of them.
A while back I posted a video about the first time home buyer tax credit, and at the time I was concerned that nobody was taking advantage of the opportunity. It now seems as though many buyers are taking advantage of the extended version of the tax credit. Perhaps the original deadline of November 30th created some urgency amongst the buyers and has urged them off of the fence to take advantage of the new deadline of April 31st, 2009.
Since posting that video have been doing some research on the real estate market I have some criticism about how many first time home buyers (even regular buyers) are using FHA loans with only 3 1/2% down in a market that is declining faster than a 3 1/2% loss per year. I know that there are many people in my industry who are trying to stir up the market and promote the FHA loan and the Home Buyer Tax Credit to get buyers off the fence. I’m not the only one who is saying this there are others as well who think that these loans will come back to bite us.
If you are in the market to buy a home anyhow, there’s no sense to not take advantage of $8000. However, it is reminiscent of the current mess that we are in if a buyer is using the $8000 tax credit as a reason to purchase a home or to get them off the fence at the least. There are many benefits to buying a home, possible tax savings (see Mortgage Interest Deduction Hustle), stability, pride of ownership, financial and educational; nowhere on that list is $8000.
Think before You Buy
It’s this type of uneducated consumerism that causes families to lose homes, banks to foreclose, and burdens taxpayers. It’s an ill-fated attempt to try to prop up the real estate market back into a position that was never stable to begin with; leading the march are Realtors at every corner. I would hope that if you are in the market to buy a home that your journey would consist of some self reflection, assessment of personal goals, assessment of family goals, and some education into the market not just into good deals on homes in areas that have seen double-digit declines in value — remember there’s usually a good reason that certain areas wind up being the biggest losers when the market corrects.
New technological advances in real estate have made it easy for buyers to self educate themselves very quickly. The challenge however, is that all they are educating themselves about, is what is available for sale and not the fundamentals of what makes a good purchase. For some, this isn’t their first go around and the process may be familiar, but to their surprise, there are areas of town that have failed miserably while others have succeeded or the very least will be the first to rebound in months or years to come.
First Things First
If you have thought about buying a home in Boise or Meridian, your first step is not to see how much you qualify for from a lender, but to sit within agent whose interests are not head of yours, who was willing to educate you in a manner that will have you questioning whether or not buying real estate is good for you.
Believe it or not there are areas of town that have been good to buyers and sellers alike and will remain a good choice no matter the market conditions. If you would like to see if buying a home is right for you please give me a call I would be happy to be honest with you and tell you that buying a home for you is not the right choice. I would be happier to tell you honestly that if you are a good candidate to be in the market to buy real estate that now is a good time to buy in certain areas. I’d even be happy to show you where those areas are along with numbers to back up my suggestions.