January 2009

Brand New Homes in Waco for Less than $100K

So you’ve been sitting in your apartment wondering if you can even afford a home, let alone a brand new one. You’d be surprised to find that some folks have been able to buy a new home for less than what they were paying in rent!

If you haven’t had a chance to tour a home built by Majestic Homes, you may be surprised at what you’ll find. They’ve got a new subdivision going up in Bosqueville school district and they’re about to start building new homes in Robinson I.S.D.

Right now, they have brand new homes starting at $89,900. Depending on your credit and interest rate you can buy a home for less than $850 a month. I had one buyer that was able to get a payment for less than $800 a month!

If you’d like more info about these houses, call me anytime. You can get my contact information from the “contact us” link on this website.

Waco Real Estate and Today

I just got through going through some stats (I’m a stats freak) concerning the market and was really surprised at what I found.

Going back the last 90 days (for homes sold) and taking into account which homes are currently under contract, it seems to me that the sweet spot right now is the $60K - $140K price range.

That’s surprising because about 8 months ago I looked at the same numbers and the price range that was hit hardest with slow sales was the $75-$125K spread.

So what’s changed in the last 8 or so months?

Last year the banks really tightened up on lending and I know for a fact that many first time home buyers were not able to obtain financing. The zero down loan programs started to dry up and knocked out those folks with little or no money and questionable credit.

Now, with that being said, the lenders are still tight compared to 3 years ago, but with the lower interest rates and the new tax credit that first time home buyers can receive (up to $7,500) from the IRS, first timers are making their way through the front doors of mortgage lenders.

You can’t forget about one important change that’s happened in the last 8 months though… Gas prices. Today, they’re less than half what they were last summer. The gas prices really put a crunch into folk’s pocket books (mine included). Now that the prices have subsided and appear to have stabilized somewhat, may people are looking to buy/invest (or, at least, they’re thinking about it) again.

If you ask me, we’ve got a good idea of what $4.oo+ gasoline can do to this country, and it’s not pretty. But back to the Waco real estate market… if you’re selling your house or, at least, considering it, ask your real estate agent about the market. Don’t settle for ”Hey, it’s not bad” or “Well, it could be better”… try to get some specifics from him/her/them. If you’re listing a house in Midway ISD that’s $400,000… You’re agent needs to break it down for you so you get an idea of what’s going on. How many months of inventory of $400,000+ homes do we have? Average days on market? What’s selling right now? What about values?

Especially right now, the real estate market is pretty tricky and it pays to be informed.

If you’re selling your house and it’s about $100,000 (the actual market value… NOT what you hope to get for it), according to my stats… You should be doing okay (well, for today, at least).

I just wonder if the first time home buyers really come out in strong force (so to speak) this spring looking for homes. After all, if they want the tax credit, they need to close before July 1st.

If you have questions about the tax credit… you can download this FAQ: $7500 Tax Credit

Oh by the way, I’ve failed to mention in any of my previous posts, for those buyers who are seeking an FHA loan, the minimum down payment has gone from 3% to 3.5%…. A new rule that went in effect on January 1st.

Buying a Home in Waco and the Tax Credit

Don’t forget that the United States Government is offering a tax credit to first time home buyers and those folks who haven’t owned a home in the past 3 years!

One of the best parts?? Even if you buy a home this year and close before July 1st, 2009, you can claim the tax credit on this years tax return! (just like if you bought the house last year). Of course there are income restrictions: If you’re married and file jointly, you can’t make more than $150,000 a year. If you’re single, you can’t make more than $75,000.

In a nutshell, the program is designed to put money into the hands of those first time home buyers. Of course, it’s actually your money (sort of), which means that the tax credit is actually an interest free loan from the government. Yep, INTEREST FREE! The I.R.S. will increase your tax liablility every year by $500 for 15 years to repay the “tax credit”… I call it a loan.

Be aware though, this first time home buyer tax credit program is only around for a short time. Hey, I don’t know about you, but I’d rather have my money now than later… especially since there’s no interest fees or penalties.

Here’s a FAQ for you, just in case you’re interested in learning more:

First Time Home Buyer Tax Credit

If you’ve been thinking about buying a home, now is a great time. The interest rates are lower right now than they have been the past couple of years or so, some sellers are willing to deal a little more now than before, AND throw in the tax credit…

If you’d like a list homes that match your criteria, you can sign up on my home search page. This service will email you whenever a home that matches your search parameters is listed on the MLS. It’s a great way to keep up with the latest listings.

Waco Home Search

Waco Real Estate, The Last Year and The New Year

Happy New Year! Man, 2008 was a “different” one for sure! Election year, bad economic news, banking institutions going under, the big bail out, the auto industry suffering mass decline in sales, etc… 2008, to many people that I’ve talked with, is regarded as a “good riddance” year. Not so much that they bad things really happened to them. It’s more like the mood for them was just not great for that year. I guess they seemed a little complacent from day to day? The mood wasn’t good??? I know that I’ve had better “mood” years myself.

The Waco real estate market was down a little in 2008 compared to 2007, but not too much really when you compare it to the rest of the country. Residential home sales were down 3.5% over all. That’s actually a difference of about 84 homes. Could be better, but it seems the Waco area has been able to hold its own in some tough times.

The average price per house sold in 2007 was $133,955. For 2008, that figures is$127,320. That represents a 4.9% drop in value. Why? In 2007 there were 2,572 new residential home listings that hit the market. For 2008, that number increases to 3,376! That’s an increase of over 31%. The fact that 31% MORE homes were on the market than in 2007 coupled with a decrease in sales… I’m kind of surprised we didn’t have a little more of a drop in price than 4.9%!

So what does the new year hold? Good question. I’m not psychic, but I do know that recently with the new lower interest rates, it seems more buyers have come forward. I don’t know how long it will last, but it’s possible 2009 could be a better year than 2008 for Waco real estate in general.

There’s still growth in the area. New people moving to town and new businesses opening up. If we can keep growing Waco, I think the whole area will do okay.

There are some deals to be had, if you look hard enough. I can tell you, that right after Christmas, at least for me, I’ve received a lot more buyer interest than I did the whole month November. I’ve talked to a couple of other Realtors and they said they’ve experienced the same of sort of “surge” (so to speak).

So at least for now, it looks like January or February may shape up to be pretty decent months. That’s of course, dependent on the number of new listings as well. Right now we have about a 7.2 month supply of homes on the market, which may sound like a lot, but actually it’s not bad. The rule of thumb that I’ve always been told: “If there’s less than 5 months of inventory on the market, then it’s a seller’s market. If there’s a 5-7 month supply of inventory, then it’s pretty balanced. If there’s more than 7 months, then it’s a buyer’s market”. So a 7.2 month supply is pretty close to balance.

If there’s a surge of sellers wanting to put their house up for sale, then that could tip the scale in the buyers favor rather quickly.

Don’t forget that the United States government has instituted a “tax credit” plan for first time homebuyers and those folks who haven’t owned a home in the last 3 years. If you take advantage of the incentives in place, you could receive an up to an extra $7,500 on your I.R.S. refund check! Here’s the FAQ: Home Buyer Tax Credit

By the way, the statistics I use are mainly single family residences. Those numbers do not include ranches, land, farm and ranch, commerical, and manufactured housing.