1. Realize that the price a homeowner can get for their home today is greater than it will be on May 1st.
Any buyer who is not in contract on April 30th this year will miss out on the Home Buyer Tax Credit ($8,000 for a first-time buyer and $6,500 for the move-up buyer). That does NOT mean houses will not sell after April 30th. It means that the buyer will demand a better price.
If you need to sell, sell now.
2. Realize more and more experts are predicting a surge in interest rates later this year.
Guy Cecala, publisher of Inside Mortgage Finance:
"There is no question rates have been kept artificially low by the Fed's heavy buying. My opinion is that rates will go up a full percentage point initially."
(meaning that 30-year fixed conforming loans, now hovering around 5 percent, would hit 6 percent)
Christopher Thornberg, principal at Beacon Economics:
"Clearly, when they (the Fed) stop printing all that money, it's going to be a shock to the system. I have to assume that when they pull back on it, it will cause a 100- to 200-basis-points rise. When they start selling off the stuff they purchased, which by my guess would come early next year, that would cause another 100- to 150-basis-points rise."
(meaning rates of 6 percent or 7 percent originally and then 7 percent to 8 percent or higher within a year)
If you want to take advantage of the low mortgage rates, do it now.
3. Read past the headlines!
Main street media, in their quest to get information out, are not reporting the whole story. Here are two examples:
Headline based on Case Shiller report:
Reports Suggest Housing Market Stabilizing
Founder of the report Professor Case:
"I'm worried. Everyone's worried. If prices sink 15 percent from here, which is a possibility, and the 2008 and 2009 loans go bad, then we're back where we were before – in a nightmare … The probability is very high of a serious double dip."
Headline based on RealtyTrac report:
Foreclosures down 10%
Actual report said:
"January foreclosure numbers are exhibiting a pattern very similar to a year ago: a double-digit percentage jump in December foreclosure activity followed by a 10 percent drop in January. If history repeats itself we will see a surge in the numbers over the next few months as lenders foreclose on delinquent loans where neither the existing loan modification programs or the new short sale and deed-in-lieu of foreclosure alternatives works."
William E. Wood and Associates
Licensed in VA
Equal Housing Opportunity