Is housing market primed?
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Realtors say government rebates make this a good time to be a buyer in the housing market. Many homes are being sold for below the asking price.
JANESVILLE — Realtor Carole Cullen sat in the sunny dining room of a charming two-story on Atwood Avenue in Janesville on Sunday.
She was waiting to show the well-kept house, offered for $169,900.
That price might put it out of the grasp of many first-time buyers, even with government tax rebates of up to $8,000 that Congress recently extended, Cullen said.
However, it's a great second home, Cullen noted, and with a new tax rebate of $6,500 just enacted for people who already own homes, Cullen is hoping for a sale.
Realtors contacted over the weekend said they were hopeful the government stimuli, combined with interest rates hovering around 5 percent, could be a boon.
Not to mention that prices are low.
"I think we've come real close to hitting bottom," said Matt Bonson of First Weber Realtors. "… Property values right now are phenomenal. You can really get a good buy."
Cullen agreed, saying that her company, Coldwell Banker, is selling houses at about 10 percent below asking prices.
Could this be the buyer's market to end all buyer's markets?
"Everything is positive. This is the time to buy a house," said George Mark of Midway Realty.
"There are tremendous deals out there," Mark said, noting houses going for $60,000 to $70,000 and some of his new, energy-efficient homes marked down to the $125,000-$150,000 range.
Bonson said it's been a tough 18 months, but there are signs of a possible turnaround, including fewer foreclosure sales.
Bonson said up to half his company's sales this year have been to first-time buyers, and the tax rebates have played a role.
"It certainly has helped a lot of our buyers get into a house," Cullen said.
The program's extension and the new rebate for existing homeowners might stimulate things even more.
And yet, Mark and others said they are battling a fear that the Janesville housing market still hasn't hit bottom, that the final effects of the General Motors plant closing are still to be felt.
"It's still nip-and-tuck to get that first-time buyer to make that decision," Cullen said.
The legislation, expected to receive President Obama's signature soon, will extend the $8,000 credit for first-time homebuyers for sales contracts entered into by April 30, 2010, and closed by June 30.
The program will be expanded to include a new $6,500 credit for owners of existing homes who are buying new principal residences. Existing homeowners can claim the $6,500 tax credit if they have been residing in their principal residences for five consecutive years out of the last eight.
The income-eligibility limits to claim the full credit for both groups of home buyers have been raised to $125,000 for individuals and to $225,000 for married couples.
Happy days are not yet here again, however, for the local housing market.
Mark said he's had a hard time selling his new homes, in part because of a glut of foreclosed houses on the market.
Mark thinks the new rebate for current homeowners could help.
"It is a tremendous benefit to them. They're looking at $6,500 that you can put in your pocket next April. Certainly, if I was in the market for a home, I would take advantage of it."
So just maybe, this is the best of times to buy that bigger home, smaller home or newer home you've been dreaming of.
"Most of my new homes have been reduced, I would say, a minimum of 10 percent, which takes everything out of it for me, and they have the advantage of being new, energy-efficient homes that they don't have to stick 10 percent of the purchase price into," Mark said.
"We're pretty optimistic because there's always going to be a need for housing," Bonson said. "And (with prices so low), it makes it affordable for the next generation that's getting ready to purchase."
Cullen, who remembers interest rates of over 17 percent when she started selling houses during the economic downturn of the 1980s, knows that good jobs are what pay off mortgages. Nevertheless, she thinks this town will turn around.
"We're optimistic," she said.
Nov 12, 2009 at 12:09 a.m.
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FOR SURE Kid!
That's the 1st thing I thought of to, when I read it. Like any Realtor is going to tell you "The market sucks. Now is a horrible time to buy. Things will not start to turn around for a good decade".
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I always get a laugh when I hear these infomercials of a "great buying opportunity." They then point to a small up tick in the market, and somehow think that a minor up swing in a trend line that is pointing ALL DOWN, is somehow miraculously a pivot point, or the sign of a bottom, and turn around. As I always like to say:
RIIIIIIIIIIIIIGHT....Good luck with that one!
Nov 11, 2009 at 9:39 a.m.
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this story sounds as much like a real estate ad as it does anything else...
Nov 11, 2009 at 2:18 a.m.
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As I have pointed out in previous discussions, unemployment will indeed be a LEADING indicator of things to come. This is a contrarian view, and time will indeed prove me correct on it!
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The stock market rally is a combination of a few different things.
1st: many companies are showing better then expected earnings because they are streamlining costs through layoffs, and downsizing!
2nd: The market speculators LOVE the easy $$$ policy of the fed, that is turning out to be a PERMANENT zero interest policy. The old saying in playing the market is "never fight the fed". Such reckless policy is great for markets, but means an economy will NEVER grow, and the dollar will be killed. Gold keeps hitting new record highs by the day; as the dollar sinks. Most investors are now putting their capital into hard assets like gold, and commodities, and not into and entrepreneurial industries (things that are growth industries, and produce new jobs); as the economy simply is in shambles thanks to the reckless policies of the fed.
Nov 11, 2009 at 12:29 a.m.
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schulist, unfortunately, employment is always a lagging indicator in a recession. The stock market may rebound, industrial orders can surge, but jobs won't come back for weeks or months. The signs do indicate that the recession (the contraction) is over, but that is not the same as saying that jobs are back or that everything's suddenly hunky dory. It just means that the direction of the economy is no longer downward.
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It took almost two years for the country to shed around 5 million jobs. It will probably take longer for 5 million jobs to come back.
Nov 10, 2009 at 2:08 p.m.
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i have two numbers for you - the first is 10.2 unemployment (and going higher?) and the the second is each and every week almost 530,000 new UI claims - why are so many people looking up and keep saying 'we hit the bottom' when we are still falling??
Nov 10, 2009 at 10:51 a.m.
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Let's see housing prices have dropped at least 10% (most people say more than 30 since the housing bubble). Have tax assessments and thus taxes fallen by the same amount? That's a story now.
Nov 10, 2009 at 10:50 a.m.
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Macdaddy is right. When people talk about a rebound in the national market, they always say that the exception is if there is high unemployment or no jobs in the area. That is, there can't be a rebound if there aren't any jobs. That's our case here unfortunately.
Nov 10, 2009 at 9:59 a.m.
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Have any of you tried to get a loan lately? I went to the bank 2 weeks ago to get a $9000 loan for a car I bought at auction that was worth $12,000. I had a credit score of 790, I have my mortgage with the bank, and they still put me through the ringer. I had to do everything but a procto exam. I doubt many banks will be out there giving out loans to people who can't afford it.
Nov 10, 2009 at 9:26 a.m.
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Exacty, davicc. One of the major factors of the economic collapse was people getting financing to buy houses they could not afford. SO what if you can get a loan to buy the house, if you have no job it will just be another wave of foreclosures.
Nov 10, 2009 at 8:05 a.m.
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Let me get this straight. The $6,500. stimulus is going to get people out buying homes. Okay that will stimulate the housing market but what about employment? How many of these homebuyers will end up out of a job and foreclosures spike again and we're back to the same problem we had when the banks made risky loans to risky buyers!
Nov 10, 2009 at 12:53 a.m.
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Excellent points unidentified.
One has to be amused at the hype that is being made at this bogus turn around. This new home tax credit will be much the same as the cash for clunker gimmick. The numbers will look great for a few quarters, and the media will run with stories on how things are starting to turn. Then when the governmnet stimulus is removed, you will have a mass drop off, and things will regress right back to where they were. As you point out; the way to "turn things around" is through job creation, and a growing economy in the private sector. All these gimmicks do is just give people false hope, and optimism.
Nov 10, 2009 at 12:04 a.m.
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Until there is job creation this is meaningless to many. People out of work aren't looking for a new home. In addition, even if it creates an increase in sales, it will probably also result in the increase of the price of the homes people are buying. The net result will be the government tossing away billions more dollars and very little real net gains for tax payers. The first people to act on this are likely the people who will benefit most, but are also the people who need it least.
Nov 9, 2009 at 9:16 p.m.
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Detroit's housing problems go all the way back to the late 1960s when the riots sent many residents fleeing to the suburbs.
Nov 9, 2009 at 7:16 p.m.
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Macdaddy, I get your point, but GM's impact on Janesville doesn't even come close to Flint or Detroit.
Nov 9, 2009 at 5:11 p.m.
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I see the sentence, displacedworker, but it just means existing homeowners who are buying new homes. You are still entitled to the mortgage interest and property tax deductions, as well as a home office deduction if you are eligible.
Nov 9, 2009 at 4:13 p.m.
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Not to rain on anyone's parade, but...it is hard for housing market to rebound without job creation. I believe Flint, MI and Detroit are still waiting for their housing market to rebound.
Just so everyone doesn't get me wrong, i would love for this to be the case. We could use the good news, and many people i know are tied to jobs that would be helped by the housing market.
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