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2010 REAL ESTATE SPRING FORECAST

Now is still the time to Buy or Sell

Typically spring as the season where homebuyers come out in force and sales pick up.

In 2010, the uncertainty created by the financial crisis makes it harder to bank on a seasonal rise in sales -- particularly in markets hit hard by unemployment.

Further complicating matters down the road are three potentially destabilizing events that are expected to occur in a tight timeframe during the spring buying season:

· At the end of March, the Federal Reserve is expected to wind up a $1.25 trillion program that's kept mortgage rates low.

· The Federal Housing Administration's announcement that it plans to tighten underwriting standards could take effect as soon as April.

· Congress is expected to allow the newly expanded homebuyer tax credit to expire, closing the door on buyers not under contract by April 30 and closing by June 30.

Economists must rely on a certain amount of guesswork in predicting what impact these changes will have when drawing up their forecasts for 2010. Many expect unemployment won't peak until next year, and it's almost certain mortgage rates can only go up from record lows.

Since housing was hammered so badly and for so long most forecasters expect housing prices to stabilize and sales to pick up in 2010, even if economic growth doesn't spring back as fiercely as it usually does in a recovery.

Homebuyer’s Tax Credit

Now’s Your Chance!

I am extremely pleased to share with you an extension of an exciting new tax credit, designed for first-time homebuyers and existing homeowners.

The new program gives an incentive to existing homeowners who have owned their current homes at least five years out of the last 8, making them eligible for tax credits of up to $6,500 when they purchase a new home.

First-time homebuyers – or anyone who hasn’t owned a home in the last three years – would still get up to $8,000. To qualify, buyers in both groups must sign a purchase agreement by April 30, 2010 and close by June 30, 2010.

The credit is available for the purchase of principal residences costing $800,000 or less, and vacation homes are ineligible. The credit would be phased out for individuals with annual incomes above $125,000 and for joint filers with incomes above $225,000.

The credit has been extended an additional year, until June 30, 2011, for members of the military serving outside the United States for at least 90 days.

As an industry, we are certainly pleased about this new tax credit. The key to returning stability to the economy lies within the housing market, and this is a meaningful credit that will create a strong foundation for future growth and make a measurable difference over the coming months in our economy.

This is said to be the last extension of the home buyer tax credit so I urge you – whether you’re a first-time homebuyer or a homeowner who has been gridlocked by the challenges of our move-up market — to take advantage of this opportunity.

Now is the time! If you’d like to learn more, please contact me today.

PAM DICKMAN