The strongest player in the downtown market today is the first-time buyer, according to Appraisal Research Counselors‘ 1Q 2009 Downtown Benchmark Report.
First-timers are benefiting from a variety of favorable factors including the first-time buyer tax credit (equal to 10 percent of a home’s purchase price up to a maximum of $8,000, available for single taxpayers earning $75,000 or less annually, or married, joint-filing taxpayers earning $150,000 or less annually, who haven’t owned a home in at least three years), the availability of FHA financing requiring 3.5-percent down payments, the freedom from having to sell existing residences, and a surplus of homes priced between $250 and $350 per square foot.
On the other hand, brokers told ARC last quarter that luxury and second-home buyers have been particularly affected by the recession, due both to stock market losses that affect their ability and desire to purchase homes and the high interest rates placed on jumbo loans ($417,000 or more).