The government has decided to continue the $8,000 “first time” housing tax break through April 2010. Coupled with slipping mortgage rates, lots of people hit the market to grab a home. An annualized sales pace of 6.1 million was the result, a 10.1% increase in sales over September and the fastest sales pace since March 2007. That increased market activity helped reduce the glut of residential houses on the market, at present sales levels it appears that there would be a supply of approximately 7 months of inventory on the market.
The average 30-year fixed rate fell to 4.50% which is the lowest since Freddie Mac has been compiling its weekly survey in 1971. Even though interest rates are attractive, many home buyers may not qualify for them. Fannie Mae and Freddie Mac have recently announced new tougher credit standards (read my blog tomorrow about the new changes).
Now is a great time to look at buying a single family property or two to add to your real estate portfolio. While it requires tenant management (or hiring a property manager), they are a great asset to hold in your portfolio and when the market improves and sales prices go back up you could sell the property and do a 1031 exchange into a larger complex. It similar to the game of Monopoly….four green houses allows you to buy one red hotel. While you may not desire to own a hotel, a nice free and clear office building or apartment complex can make all the difference between having to go to work everyday and getting to chose what you do later in life! Start thinking about your retirement today and consider using real estate to reach those goals!
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