The deadline for the 2010 Homebuyer’s tax credit seems like a distant memory now, but how will the future real estate market fare? Now that the frenzy has died down, agents and homebuyers alike are curious as to what a credit-less future means for them. Each market varies from city to city, but here is what a couple local agents had to say about their particular neck of the woods:
Mark Tarinelli of PushPin Realty in the Wheaton/Chicago area feels that the housing market has cooled down considerably since the terminus of the tax credit. Nearly a third of his business in 2009 was motivated by bargain-hunting first-time and existing homebuyers, but now that the Tax Credit season has passed, a majority of his clients are investors. Despite that, Mark is positive about the state of the current market. “It is still a great time to buy,” he says, “especially if the buyer is looking to trade up from a smaller home. The [Chicago] market has dropped 10-15% in price, so this may be the best opportunity that move-up buyers will have.”
Patty Sperber of Coldwell Banker Residential in Boston works in a very different real estate market. She had very few clients driven by the tax credit. “Most of the buyers I work with were already planning to buy before the prospect of the tax credit,” Patty remarked. She also mentioned that though people are attracted to the low interest rates in Boston, she warns buyers against getting pre-approved for more than they can afford just because they can. “There are some crappy lenders out there who will pre-approve you regardless of your situation,” she cautions, “so it’s important to find a good lender and a buyer’s agent to have a clear understanding of the market and the mortgage structure.”
In general though, lending opportunities may become more limited as time goes by. According to Builder Magazine, “For home buyers, this is likely to mean more documentation, larger down payments, and more scrutiny by lenders. The mortgage menu will also be shorter, and risky “exotic” mortgages such as interest-only loans and payment-option ARMs are likely to virtually disappear.” It is hard to predict what the future may hold, but it does seem like life after the tax credit may not be as devastating as critics once thought.