Well, things seem to be heating up once again with first time home buyers as well as move up buyers in our area. People are trying their hardest to get contracts signed around by April 30th to receive the tax credit. The homes that are selling are around $225,000 and below. The good ones are selling rather quickly, which is a great sign for move up buyers that have prepared well. If they can take advantage of this little “sellers market” in their market segment and then take advantage of the “buyer’s market” in their move up market segment, then I see that as a huge success. Values have held steady for those properties that have been a target of the first time home buyers. Prices have not increased, however; they have mainly held firm. It will be interesting to see what the market will do once May rolls around. Once again, if the government doesn’t concentrate on creating opportunities for private sector jobs, then we are in for a long haul. Of course, it will still take a long time for the economy to work through the 8 Million jobs lost over the last two years. The government is sure not to extend this tax credit, but they may just have to come up with more opportunities out there if our economy does not start to show healthy & sustainable signs of recovery soon.
Today the Bureau of Labor Statistics jobs report came out that announced that we gained 162,000 jobs in the month of March(www.bls.gov). On Wednesday the ADP (Automatic Data Processing) said we lost 23,000 private jobs. So what does all of this mean? First of all, it is good news that the BLS report shows job gain. I want to make it clear that any growth is good for us right now. The bad news in my opinion is that most all of these jobs are government jobs and many of them are temporary. It is estimated that the US Census Bureau will create approximately 800,000 jobs from January to May of this year. That is all wonderful, but May is only a month away. By the way, did you send in your Census yet?
I do believe that the health of our country’s economy, including our housing market, is going to be built on the foundation of a strong PRIVATE work force. Small businesses and corporations are what encourage the American Dream that we have become known for. Government jobs only create more dependence and add to our problems. As you can tell, I am not a fan of big government.
Our housing market has stopped its hemorrhaging, but we continue to seep if you will. The tax credit that expires in 28 days, which will NOT be extended, is holding us steady with properties under $200,000 here in the Willamette Valley. Homes over that price range and especially homes above $300,000 continue to drop in values. Again, everything hinges on our employment rate and the confidence that Americans have in our economy. We will not see home values stop dropping until we get people back to work. Our current unemployment rate is holding at 10.5% here in Oregon. That is better than the 11.6% it was in 2009, but we have a long way to go. I don’t believe we will sustain our problems in the long run with more government jobs.
In the midst of the economic conditions, I do believe now is the best time to buy a home if you are in the market. I do believe that housing rates will continue to rise from here on out, which will cost a buyer more money than the potential drop in home values. If rates go too high, then it will price home buyers out of the market completely, then we will be living in the early 1980’s once again. Only cash buyers were purchasing homes and only a few were selling on contract. Purchase agreements must be inked by April 30th, and homes must close by June 30th to get the $8000 “First Time Home Buyer” tax credit, and the $6500 “Move Up Home Buyer” tax credit.