Spring in Indianapolis brings many changes. The spring real estate market in Indianapolis tends to be more active than any other time of year. This spring promises to be no different, and upcoming changes could significantly impact both buyers and sellers.

The Changes:

FHA Lending Changes: Recently FHA announced that starting April 5th upfront MIP will increase from 1.75% to 2.25%. On a $200,000 home that means an increase in cost to buyers of $965.
Expiring First Time Buyer Tax Credit- The first time buyer tax credit which was responsible for a vast majority of the homes that sold last year expires April 30. This means buyers must have accepted purchase agreements in place by April 30 and close by June 30th to receive the credit.
Interest Rates: Interest rates are going up. Simply stated, the government has been subsidizing rates to stimulate interest in home sales. Every sign now points to an end to those subsidies which means higher rates are on the way.

The Potential Impact on You

Buyers:For Buyers, especially 1st time buyers, waiting will cost you a great deal. For starters, you run the risk of losing the First Time Buyer Tax Credit. Second, your costs of sale may go up due to the increase in MIP and higher interest rates. Lastly by waiting you may pay more for your house. Last year when the first time buyer credit was scheduled to end, we saw a significant decrease in first time buyer homes and home prices went up 1-2%. Spring already brings higher demand...add these other factors and waiting could cost you a great deal, maybe even your dream home!

Sellers: For Sellers, this could easily be the best time in years to get your home on the market. Look at all the factors and very real time constraints facing buyers and ask yourself...what happens when all of this goes away. Common sense says that the housing market will slow down significantly after the expiration of the tax credit. Plus homeowners who have lived in their home 5 years can also receive a tax credit up to $6500 if they buy their next home by April 30, so waiting could cost you as well. 

If you are considering buying or selling a home, contact a member of the Matt Borushko Team of Keller Williams Realty quickly. Acting fast can make a major difference in costs, and may be the difference between a  successful transaction or not!

Here is a great report talking about the changing landscape of home buyers and the effect of the tax credit expansion to existing homeowners. The tax credit is definitely having the desired effect which is good news for home sellers and home values. In Carmel, Fishers, and Noblesville there is a shortage of good homes in the 200-350K range. This means those who list now are selling quickly (assuming the condition is good and they price it correctly). In order to get the tax credit, existing sellers must purchase their new home by April 30 and close by June 30. If you want to sell your home and take advantage of the market, act now! The Borushko Team of Keller Williams Realty is ready to help you sell your home!

More Existing Homeowners Move up in November

By AUSTIN KILGORE
December 21, 2009 11:12 AM CST

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The $6,500 homebuyer tax credit is getting existing homeowners off the fence and to the closing table, according to a Campbell Communications monthly survey of real estate market conditions.

Existing homeowners accounted for 41% of home purchase transactions in November, up from 38% in October. First-time homebuyers decreased from 47% in October to 45% in November, and investors’ share of activity declined 1% to 14% in November.

“Our survey statistics are showing the effect of Congress’s delay in extending the homebuyer tax credit and then its eventual extension,” said the study’s research director, Thomas Popik. “The first-time homebuyers started to lose interest in October when it appeared that Congress wouldn’t extend the credit. When the credit was finally extended in early November, current homeowners jumped at the new opportunity for a tax credit on their home purchases.”

Activity in the non-distressed market also increased. The share of non-distressed houses purchased jumped from 58% in October to 63% in November. Existing homeowners tend to purchase non-distressed properties, the firm said.

The market report is a survey of 1,500 real estate agents across the US.

 

For people in the Indy area, the news keeps getting better...Indy was just announced as the most affordable major city in the US by money Magazine!. This holiday season buyers will also find low interest rates, and a first time buyer tax credit for first time buyers and current homeowners as Incredible Stocking Stuffers which you can hang by your new fireplace!

For those buyers in Carmel, Fishers, Noblesville, and the Northern Indianapolis areas, the Borushko Team will be working during the holidays to help your housing dream come true. 

If you are a potential home buyer in the Indianapolis area and are thinking about buying in the spring, you may want to re-consider your timing. I know what you're thinking...as a real estate agent of course I would say this is a great time to buy. There are facts however that can't be overlooked and should be considered.

• First Time Buyer Tax Credit has been Extended. Buyers must have an agreement prior to April 30, 2009 in order to qualify.
• Interest Rates are incredibly Low
• Builders are desperate to sell their current inventory.
• Sellers who are on the market now need to sell and may be more inclined to negotiate

We only need to look at the housing market for October and November of this year to see what happens to housing prices when outside factors (First Time Buyer Tax Credit) influence demand in the housing market. Buyers who waited until September and October to begin their home search were greeted with less homes to view and more competition. In many cases they ended up paying significantly more than they would have just 2 months earlier. In Carmel for example, the home prices in the 200-300K price range rose nearly 4 percent in those few months.

Waiting until spring means you will be competing with many more buyers for the same houses. More buyers means more demand. More demand leads to higher home prices. So if you are considering buying in the spring but can buy now, this is the season with the greatest opportunity. As full time agents in Fishers, Carmel, Noblesville, and Indianapolis the Borushko Team will be working throughout this incredible season. We have extensive knowledge of the market and 15 years experience working with builders. We would love the opportunity to put our knowledge and experience to work for you!

Last week, after the Senate gave its final and fully supportive approval on the homebuyer tax credit extension, the House of Representatives voted overwhelmingly to pass the legislation, sending the tax credit to President Obama who's final sign-off on Friday made it official. 

The $8,000 first-time homebuyer tax credit, which was slated to expire Nov. 30, 2009, will be extended for contracts signed before May 1, 2010 that close before July 1, 2010. First-time buyers, who are in the process of closing now, no longer have to worry about qualifying for the $8,000 tax credit if they do end up closing after the Nov. 30 deadline. The new legislation also increases the income limit for couples with income up to $225,000, a nearly $55,000 increase above the current level.

Tax Credit Expansion: Buyers who already own a home are also now eligible for a tax credit and the purchase of a home. The $6,500 maximum credit will be available to existing homeowners who have lived in their current residence for five of the prior eight years. The legislation does set forth several provision including, limiting eligibility for existing homeowners to homes worth $800,000 or less, as well as making both credits available only for primary residences, not second homes or investment properties. The legislation will take effect November 7, 2009 and is not retroactive.

For sellers in the Indianapolis area, homes are taking an average of 140 days to sell. What this means is that to take advantage of this incredible opportunity, you need to get your home listed now!  Contact a member of the Matt Borushko team via email (matt@mattsellsiindy.com) or call us today at 317.843.8739 with questions or to receive a free market analysis!