Eric | Cherry Creek Today

February 5, 2010 By Eric

Whether purchasing real estate for investment purposes or for personal use, it is a good idea to keep a close eye on the real estate market. After all, by accurately reading the ebbs and the flows of the market, you can potentially save thousands of dollars on your purchase. Of course, the trick to making this happen involves knowing how to time the market in order to purchase the property at the best price possible while still getting the property of your dreams.

What Does Timing the Market Mean?

Put simply, timing the market involves choosing the best time to make a real estate purchase in order to save the most money. When in a recession, such as the one the United States is currently climbing its way out from, purchasing property right away will prevent you from saving as much as you possibly can. If you wait too long, on the other hand, real estate prices will start going up and you will have missed out on the opportunity to the largest amount possible. Therefore, timing the market involves watching market trends in order to purchase the property as close to the bottom price as possible.

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Following the U Curve

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In order to better understand the concept of timing the market, it can be helpful to think of the market and its recovery as the letter “U.” The top left side of the U would represent when the economy is in full-swing, which is when real estate prices are at their highest. As the effects of the recession start to hit the real estate market, prices start to slide down the left arm of the market. Ideally, you will want to make your real estate purchase once the prices hit the bottom of the U. Of course, it isn’t possible to perfectly time the market at its lowest point. Rather, your goal should simply be to make your purchase as close to this bottom point as possible.

The bottom line is simple – if you missed making your purchase while the market was experiencing downward momentum, it’s not too late to purchase real estate at significantly reduced prices. Most markets throughout the country have already bottomed out and are starting to climb back up the right side of the U. Combine the low prices with government tax breaks, and there truly has never been a better time to make a property purchase.

About the Author:
Eric Bramlett is the co-owner & broker of One Source Realty in Austin, TX. Eric specializes in Lake Travis real estate, Austin condos, and Steiner Ranch real estate.

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Real Estate Today: Understanding the $8k Tax Buyer Credit

March 25, 2009 By Eric

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In an effort to help motivate homebuyers and to get the economy back on track, Congress has recently enacted legislation to provide a tax credit to buyers. Although the new tax credit is restricted to those who are purchasing a home for the first time and is only valid on purchases made between January 1, 2009 and December 1, 2009, the new credit can reward buyers with up to $8,000 in credit. In addition, unlike previous tax credits that have been provided to homebuyers, the new credit does not need to be repaid over time.

In order to qualify for the new tax credit, homebuyers must meet certain criteria. First, the person purchasing the home must be a first-time homebuyer. According to the legislation, a first-time homebuyer is defined as someone who has not been the owner of a principal residence for a period of three years prior to making the purchase. There are also income restrictions placed on who can receive the credit, with the credit being only available to single taxpayers who have an income of up to $75,000 and married taxpayers with an income of up to $150,000.

The actual amount of the credit the homebuyer receives is based upon the purchase price of the home, with the amount of the credit being equivalent to 10% of the price. There is, however, an $8,000 limit on the amount that can be credited to the homebuyer. Therefore, if the purchase price of the home is more than $80,000, the homebuyer cannot receive more than $8,000 in tax credits.

Under the new tax law, any property that can be used as a primary residence is eligible for the tax credit. This includes, but is not limited to:

Single-Family Detached Homes
Townhouses
Condominiums
Manufactured Homes
Houseboats

Newly constructed homes are also eligible for the tax credit. If the newly constructed home is purchased from a home builder, the settlement date must be between January 1, 2009 and December 1, 2009 in order to be eligible for the credit. Buyers who construct a home on a property they previously owned, on the other hand, are still eligible for the credit if the date they occupied the home was on or after January 1, 2009 or was before December 1, 2009.

Although the new legislation is different from previous legislation because the credit does not need to be repaid, it is important to note that the homebuyer must utilize the property as his or her primary residence for at least three years after making the purchase. Otherwise, it is possible that the credit will need to be repaid.

Eric Bramlett is the broker & co-owner of One Source Realty, a boutique Austin real estate firm. Eric has been a full time real estate professional since 2003. He currently guest blogs in a number of locations, and writes for his Austin real estate blog consistently.

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