Ah, the million dollar question.  According to the National Association of Realtors a few hundred thousand extra transactions will take place as a direct result of the real estate portion of the recently signed stimulus package.  The provision directly responsible is the $8000 tax credit for first-time home buyers that does not have to be repaid as was the case for last year’s ‘credit’. 

While I am convinced double that amount for any buyer this year would have brought everyone off the sidelines to purchase, we’ll take what we can get.  I’m proud of my fellow real estate professionals for fighting to ensure our clients at least didn’t lose anything from a buying perspective, but my opinion is that the government lost an opportunity to truly allow real estate to lead an early recovery.  More incentives and tax breaks should have been given to absorb the current and upcoming inventory of foreclosures, while at the same time discard any plan that uses the tax money from the 92% of homeowners that are paying their mortgages….but I digress.

What really matters is that we remain in the same wonderful buyer’s market.  It has improved for first-time buyers for sure with the new credit.  If you have not owned a home in the past 3 years or are a first-time buyer, find a good real estate agent pronto to ascertain your options as this is the definition of ‘buy low.’

It’s still wonderful to sell and buy in this market.  As you’ve heard me say many times, it’s all relative.  Here in Northern Virginia, whatever you lose on the front end (your sale), you gain on the back end (your purchase).  You simply want to sit with your agent and go over a net sheet to see the opportunity I’m talking about.

One ‘rumor’ that has been out there the past few weeks is this idea that the feds are going to mandate a 4% interest rate among banks to spur things along.  This did not happen and there’s no talk that it will.  Interest rates are driven by market forces and are still excellent.

So, the jury is out as to how much the stimulus plan will help, but regardless… buyers, get out there.  I’ll next be reiterating the necessity to educate yourselves on the differences between short sales, bank owned properties, and ‘normal’ sales by homeowners.  Here in Northern Virginia it is imperative to understand the differences and I’m sure it is the same in your neck of the country.