Three reports to perk up the market
Amidst the property market slump, we’re reading positive views about the industry lately. Take for example broker Linda A. Gary’s observation in the Palm Beach area in a recent article from Palm Beach Daily News . She states, “I have clients who are looking for luxury properties in the high end – $20 million, $30 million and above. What we’re finding is that inventory of high-end, quality homes has been hard to find… The clientele we’re seeing today understands that high-end properties — especially those on the water — are an investment for the long term, one that will deliver future returns. Our summer business was good and we expect the next few months to be even better. The economy hasn’t changed the fact that Palm Beach is a unique market. The island has so much to offer high-net-worth individuals — tight security, lovely weather and gorgeous architecture. High-end homes that are priced right will find buyers.”
Perhaps the recent Loan Performance Home Price Index (HPI) by real estate data firm First American CoreLogic’s can help add more confidence to buyers like in Palm Beach. The newly revised report states that although national home prices continue to decline, its rate of downfall has slowly eased, keeping analysts hopeful that the market bottom is drawing near. The report states, “The index forecasts positive appreciation beginning in the spring of 2010. Including distressed sales, cumulative peak-to-trough declines are projected to be -37 percent by March 2010… In August 2010, the index is projecting that 12-month appreciation for national home prices will be 4.6 percent and that home prices in two of the most depressed markets, California and Florida, will show gains in excess of 7 percent.”
Finally, we’re expecting better new housing sales for this quarter as the first-time homebuyer tax credit was extended. The extension allows buyers a tax incentive when they buy a home until at least April 30, 2010 and until April 30, 2011 for qualifying military personnel. A new tax credit of up to $6,500 is available to qualifying existing homeowners who buy a new primary residence (or have one built) until April 30, 2010. The maximum allowed purchase price is $800,000, which won’t be applicable to Linda Gary’s high-end clients, we suppose. Still, this would be more attractive to those hoping to own their first house.