The New Tax Laws and more to come...

2009 is going to be a great year for first time home buyers particularly - VA and FHA loans are available with 3% down.  People have asked the questions "is'nt that what got us in trouble in the first place" squeezing people into homes that there could not afford, but no there is a difference now - houses are available at 60% plus off their peak prices.  This means that for eg. the house that we are bringing to market now can be purchased with $3500 down  plus closing costs, and a payment of $800 a month.  The person who buys this home has to prove they can pay this mortgage, and in all honesty that person is probably paying way more in rent right now.  Additional benefits include tax and pride of ownership.  

As this year evolves more screaming deals will become available especially bank owned properties which have mounting inventories.  People who are selling houses this year will take a big hit because of the competition with banks.  I would not sell in this market unless I had a lot of equity and had too. 

The Obama administration will throw more dollars into first time buyer incentives, tax credits, wonderful interest rates.  If you can buy today for cashflow or flip for a profit there is no reason not to get involved right now.  It is pointless getting in at the bottom when you have no skills acquired to navigate the market and get things done.   The media created this monster to some degree, and now they are scaring those who should be buying in away.  

Stay close to your market and become as knowledgable as you can on the dynamics and then go for it.  It is never a perfect time - I urged people to exit the market in late 2005 and we were right on the money with that. In case you did not believe me I brought Bruce Norris, one of the best data oriented CA experts to present at the SJREI at that time also.  Those who acted then are happy.   It may be time to start looking again, we have purchsed three houses in the last four months and are getting down to some serious business now.