Real estate official says now is time to sell
Published 6:47 am Friday, December 18, 2009
Shane Wright has a message for people looking to sell their home: Now is the time to do it.
Wright, a project manager with Real Estate Equities Development, spoke to about 20 people Thursday at Village Cooperative retirement community about prospects in the housing market.
“Considering what we have gone through in the last couple of years and what is out there right now and what is happening right now, I cannot emphasize enough that right now is the perfect time to sell your home,” Wright said.
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The key reason, Wright said, is that interest rates are currently low at around 5 percent, and he said the rates are expected to increase in the spring.
Once the interest rate rises, Wright said people won’t be able to buy as much house for their dollars. People often estimate the house they can afford at a certain price.
For example, if someone can afford an $800 a month mortgage payment. With a 5 percent interest rate, someone could afford a $129,000 home on a $800 a month payment, Wright said. If the interest rate rose to 6 percent, someone could then afford a $117,000. If it rose to 7 percent, that person could then afford a $108,250 home.
Wright said that would mean certain buyers won’t buy homes at a certain market price. That would then eliminate the number of buyers for a home, Wright said.
The $8,000 first time home buyer tax credit is another reason to buy or sell a home now, Wright said. That tax credit was recently extended until April of 2010, but Wright said it’s unlikely the credit would be extended again.
People who haven’t owned a home in the last three years are eligible for the $8,000 tax credit.
Wright said the tax credit and the low interest rates make it so more people can afford to buy a home now.
“There are more buyers, whether they know it or not, who are able to possibly buy a house,” Wright said. “It’s going to produce more buyers looking for homes, that’s the goal.”
The tax credit has also been expanded to include a tax credit of up to $6,500 for existing homeowners. This applies to homeowners who’ve owned and resided in the same home for five consecutive years out of the last eight years. The home doesn’t need to be more expensive than the owner’s previous home.
The tax credit can be applied to taxes for 2009, which are filed in April.
Home values have decreased in the recent years. Wright said some homes are worth about $100,000 that previously sold for $130,00, which he said is about the average values decreased. Many people have told him that they’re waiting for their market value to increase before selling their home.
Wright said values may not increase to where they were for three to six years if not longer.
“If you wait for value to come back, you could be waiting a while,” he said.
Wright recommended that potential sellers have a professional look at their home to assess the property.
Many people view spring as the prime time to sell or buy a home, however, ReMax real estate agent Lindy Rider said winter is a strong time to sell because many other sellers take their home off the market until spring.
“I always think of winter as being an opportune time,” she said.