First Time Home Buyers Have An Effect on The Real Estate Market
Lower Interest Rates and Federal First Time Home Buyer Rebate

First-time Home buyers accounted for half of all purchases nationally during the first quarter of 2009 as reported by the National Association of Realtors. 134 out of 152 metropolitan statistical areas1 reported lower median existing single-family home prices in comparison with the first quarter of 2008, while 18 metros had price gains.

First-time home buyers were reacting lower prices caused by foreclosures and short sales, The enticement of the $8,000 Tax Rebate and lower interest rates got a lot of First Time Home Buyers out on the streets for their dream home. Their sales had a dramatic impact on metropolitan area median home prices in the first quarter.

Many buyers sought deeply discounted distressed sales - foreclosures and short sales - which accounted for nearly half of transactions in the first quarter and weighed down median home prices in most markets.

The national median existing single-family price was $169,000, which is 13.8 percent below the first quarter of 2008 when conditions were closer to normal. The median is where half sold for more and half sold for less, but distressed homes typically are selling for 20 percent less than traditional homes and are downwardly skewing median prices.

“Given the unusual mix of conditions around the country, the expertise and negotiating skills of a Realtor® have never been more important,” McMillan said. “Unparalleled knowledge of local markets is crucial for consumers.”

Total state existing-home sales, including single-family and condo, were at a seasonally adjusted annual rate2 of 4.59 million units in the first quarter, down 3.2 percent from 4.74 million units in the fourth quarter, and are 6.8 percent below the 4.93 million-unit pace in the first quarter of 2008.

Seventeen states experienced sales increases from the fourth quarter, and six states were higher than a year ago; complete data for one state was not available. Sales in the first quarter do not reflect an impact from the first-time home buyer tax credit.

Lawrence Yun, NAR chief economist, sees the market in a lull before an upturn. “Over the past couple months, contract activity for home sales, buyer traffic and inquiries about the $8,000 tax credit have all increased,” he said.

“Close to 455,000 buyers purchased their first home during the first quarter, and those are likely just the first wave of new buyers coming into the market - they’re critical for a housing recovery,” Yun said. “Housing affordability conditions are at record high levels and we expect a measurable increase in home sales during the second half of the year, which would help stabilize prices in most areas.”

Here along the Wasatch Front in Utah, the statistics for the period ending April 30, 2009 were definitely on a brighter side than most of the rest of the nation. 813 homes were sold as reported by the Wasatch Front Multiple Listing Service with an average sales price $250,801 which is only a drop of 8% from the same period the previous year.

The State of Utah also contributed to our sales activity by offering a $6,000 Home Purchase Grant. The Home Run Grant is a mortgage assistance program that grants $6,000 to home buyers who purchase a newly-constructed, never-occupied, primary, single-family residence in Utah. The Home Run Grant is funded by the Housing Relief Restricted Special Revenue Fund, established by Utah Governor Jon Huntsman, the Utah State Legislature, and Utah Housing Corporation.

Linda Bills - Home Solutions in Utah

25 Years Experience and some new ideas on how to buy and sell Real Estate.

by Linda Bill - 05-13-09

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Source: http://homesolutionsinutah.com/Articles.html