Are You Getting Tired of Being Outbid?

The Currently Frustrating First Time Buyer Landscape It has been an amazing transformation in the housing market - multiple offers scenarios are back in a major way, primarily on lower-end price ranges. Just a few months ago, it seemed there were 20 listings for every willing home buyer.

Not any more.

Today, first time buyers are FRUSTRATED when they make an offer and lost in the piles of offers, which in some cases are 30, 40 even 70 other offers! And within those offers, many of the would-be buyers are investment groups, buying with cash. It's big money squeezing out the smaller money. Just like that. First time buyers are getting boxed out.

This is frustrating when you think of the psychology of the today's first time buyer. They're overcoming quite a lot of fear and uncertainty after watching the devastation that has hit the housing marketplace in the past few years. Is now the time? Think of the nerves this requires! And on top of that, there's a sense that these buyers deserve a shot, since they weren't a contributing factor in this whole messy episode in the first place. Right or wrong, I can understand that feeling.

Frustrating.

Get Ready For a New Resource

Fannie Mae's "First Look" program is about to come online. Fannie Mae has a large inventory of foreclosure homes, just what the investor groups are after. But that's also what a lot of first time buyers see as good price opportunities. Here's how First Look is going to help:

* reducing deposit requirements to as little as $500
* renegotiate offers after appraisals
* up to 45 days to complete transaction, up from usual 30 days

Fannie Mae's intent is to provide easier access to this inventory for owner occupants. This is not restricted to first time buyers, but it will absolutely affect that sector of the market if the program comes around as intended.

If you have any questions about this, feel free to email me.

Rewind: Retirement Overconfidence, April 2006

In April 2006, I was in Chicago preparing to give a best man toast at a wedding. I jotted down some notes on something I had with me for reading material. And this morning, cleaning out some stuff in my office, I came across the notes, turned them over to see what I had written on.

"Workers have Retirement 'Overconfidence'"

Wow. This was 3.5 years ago, and the study that the above article references indicated that 68% of workers surveyed reported that they were confident about their retirement savings. It also suggested that 53% of them had less than 25k saved for retirement.

That sounds like a horrible mis-match, but to me, that's only ~21% that are delusional for certain (assuming the 32% NOT confident are all in the group that has less than 25k saved so far.)

But 77% had less than 100k saved for retirement. When we retire at ~67, and live to 78 (78 is the US life expectancy as of 2007), that 100k isn't going to provide much of a Winnebago budget if it has to last for 11 years.

• SIDE NOTE- And at least one prominent US doctor believes the first person to live to age 150 is currently a man in his mid-50s. Read that again. Do you still want to plan to retire in your 60s?

So where are they now? I'd love to see what the current survey says. How many are confident about their retirement planning now that we've passed into this era of economic crisis. How much has it affected confidence? (How much has it affected savings?). And how will it shape our expectations, planning, and savings habits going forward?

Tax Credit Expansion and Extension - Best FAQ Resources

Take your pick:

• Straight from the horse's mouth: IRS
  
• User-friendly page from the National Association of Home Builders

The NAHB site was put up in a hurry. They want to sell you homes. Great motivation to put together a clear communication on the subject. Check it out.

Weekly Rate Survey on Mortgage-x

I participate in a weekly survey on mortgage-x. For the upcoming week, I said:

Vote: Over the next 30 days rates will decline slightly; over the next 90 days rates will remain unchanged.

Comment by John C. Glynn: No signs of inflation anywhere, and wide profit margins from lending institutions; there's fat to be cut even if the inflation specter pops up. I see a lid on rates for a while."

See what others say.

Tax Credit Update - Move-Up and First Time Buyers (APPROVED)

Obama has just signed the tax credit expansion/extension into law. It affects first time buyers, and now some move-up buyers as well.

Last week while this was still making its way through Congress, I asked readers to comment on how such a change might affect them. I received a good number of responses. Here are some highlights:

• 68% of responses were generally positive in response to the credit
• 37% indicated specifically that this credit would have positive implications for our general economic health
• 16% indicated that this specifically urges them along in plans that were loosely taking shape as-is
• 0% of responses contained comments that this would dramatically change their plans
• 26% of the responses had comments suggesting the size of the credit cause the credit to be ineffective
• 11% of the responses had comments suggesting that the credit was reaching too far up the socioeconomic ladder; either the Move-Up Buyer was being wrongfully rewarded, or that the income limits were too high
  
• 16% indicated specifically that this credit would have negative implications for our general economic health

And as a side note:

• 37% of responses had something sarcastic to say
  

Thanks to all who took the time to read, and especially to respond.


Some key points of interest with the new revision:

• Income thresholds are raised
• Move-Up buyers can claim a tax credit of up to $6500
• Dates have been extended into mid-year 2010
  

If you're buying a home next spring, here are some key qualifying dates to remember.

• April 30, 2010 : You must be under contract for your new home
• June 30, 2010 : You must be closed on your new home

And if you are now trying to figure out how this credit might now apply to your specific situation, the IRS has a basic info page, and also a scenario page that has just about every possible angle.

Keep me posted - I'm really interested to see if this has an impact on our markets. If you're interested in reading my view, I explored it right here.