Home sales up 68%; is this start of the turnaround? Is the housing stimulus working? How do I take advantage of this market and government incentives?

Hello and thank you for reading The Insider Real Estate Investment Blog! 68% is a pretty big number, where the heck did it come from? It is the percentage gain in home sales from February 2009 to March 2009. Okay maybe not world changing news, but certainly there is a lot of really positive statistics and information in the real estate industry right now. In this blog I am going to roll through some local statistics, national statistics, give my spin on them and opinion where I think the market is headed and HOW and WHY you should be buying real estate and taking advantage of this historic opportunity. Sound good? Hope so, let’s gets started!
Spokane area market activity and statistics look great. Spokane’s current inventory has remained flat all year and our closed sales and median home price has gone up. Inventory levels are below 2008 and we have not seen a big inventory increase even though spring is the most popular time for homes to be listed on the MLS. Closed sale are up sharply as mentioned 68% over last month. We had 326 closed sales in March compared to 382 in March 2008, so still slightly down year over year and still a far cry from the 511 in March 2007. Median home price in the Pacific Northwest has remained very strong through the recession and housing bubble. Current Median home price in Spokane County is $176,200 which is only 1K lower than ’08 and 2K lower than ’09. That is nothing! We are healthy here. North Idaho is not quite as on the up and up as Eastern Washington. Kootenai County was down in median price over 4% from October 2008 to March 2009. A little more of a bubble burst in North Idaho but local economics have North Idaho coming into some strong growth over the next 10 years and from everything I have researched I completely agree. In fact I was on a coaching call with David Lindahl (commercial real estate investment guru, specializes in apartment buildings in emerging real estate markets) the other month and he named Coeur d’ Alene (even though he could not pronounce it to save his life) in the top 15 for emerging real estate markets in the United States in the next ten years.
The rest of the country is doing well also! Home sales have been up nationwide 2 months in a row! It’s been a while since we have seen that statistic. Certain pockets of the country are very similar to Spokane and are doing well, some markets even appreciating like parts of Montana (has 4 cities in the top 25 for real estate) and West Virginia.
So is this the real estate market turn around we have been waiting for? Well, kinda but not quite. The numbers are great and should be noted. The reality is a strong spring market in real estate is very typical, so some of these numbers are to be expected. The good news ……. Home buyers are out and about, interest rates are killer right now, in fact some of the lowest we have seen in 50 years and the home buyer tax credit is working perfectly (more on this later). Loans for home buyers right now are very favorable. The bad news …….. unemployment is at a whopping 8.5% nationwide with no signs of a quick recovery there. This is also contributing to an increasing number of foreclosures which is still a problem and will be around for another year or two. Come fall and winter 2009 I think some of the ugly real estate problems will show face and we will stay flat or decrease again from August 2009 to February 2010. My opinion is the real turnaround is primed for spring 2010. We will again enjoy a strong spring market and maintain it through the year and so goes the real estate market cycle. So there’s my bold prediction, the market will truly start cycling up spring 2010.
If spring 2010 is when the market will start heating up that gives us 12-24 months to make some awesome real estate investments without trying to find a syringe in a haystack (I know that’s a little graphic but I needed something bigger than a needle). Two key ways to take advantage of the market is to sell and buy. I put sell first because believe it or not it is a good time to sell certain investment properties and take those funds and invest them in this market. Do you have some rentals with great tenants? How about some lease options that the tenant is to buy out? Get these people with a lender!!! There are some fantastic FHA loans out there right now that are not too tough to qualify for! And if they buy your property Uncle Sam is going to give them $8,000! No kidding. Who qualifies for this? Anyone who has not bought a home in the last 3 years (and of course does not own a primary residence). Heard rumors and want clarity? Then I’ll say it again…… home buyers get an $8,000 tax benefit that does not have to be paid back! Think that will motivate your tenant? Me too and I have seen more investors cashed out of their property with this incentive in the last 3 months than I saw the last 6 months of last year. So get your tenant with a lender and educate them how to become a homeowner and get money for doing it. There are a couple of great lenders that have FHA and first time home buyer products that follow this blog so I would start there! (see top of page under blog followers)
So the moral of the story is sell to your tenants for a profit and help them out. Then invest your funds in a short sale, REO or just a nicely discounted piece of real estate! Don’t hold out another year or two for an extra $10,000 when you can make $20,000+ in the same time frame from buying the right property in this market. One of the top strategies I am teaching my investor clients about is purchasing discounted properties and doing lease options. The lease option market is extremely strong and you can set a tenant buyer up to be in an equity position when they buy you out and you will still make a very large profit. How cool is that! You get a phenomenal deal, sell it for a good deal and help somebody achieve their home ownership dream. That is what it is about and a solid strategy in this market. Call or e-mail me for details on this play. But the bottom-line is you can get deals that cash flow very well and buy at such a discount you don’t need the market to appreciate to make a big chunk of dough.
Alright so we have an unbelievable window for purchasing real estate that is open right now. Will you be able to tell the tale of wealth building in this market 10 years from now or are you going to be saying I wish I bought 10 years ago like you were in 2005? Here is my plug ….. Extant Realty is “The Real Estate Investment Headquarters” and will help you with your real estate purchases so please give us a call 509-926-4018 or visit our web site www.YourRealEstateInfo.Net . Take action, build wealth, buy smart(there are bad deals in every market) and best of luck.