Yes, it is true that the market is stepping up.  I think the stimulus package has had an impact on the first time buyers in many regions including Lynchburg MLS area.  Homes under the $300,000 range are selling more than they were.  We (us Realtors) are doing all we can as an industry to keep that momentum going. But

Lynchburg Real Estate Market Recovery

my argument is that increased activity does not necessarily mean recovery.  I don’t mean to sound pessimistic but I am a realist.  I say don’t get your hopes too high, just yet.

In showing property to buyer clients I am noticeing that most of the homes are distressed properties.  In some cases I’d estimate 50% of the homes I’ve showed one particular client were either under foreclosure, or short sale or just about going into foreclosure.  It is important to get these distressed properties off the market and this is the first step to recovery.

But like a friend and I were talking earlier we can’t skim across the bottom forever.  We are not going to make real real estate recovery until we find a way to increase activity in the step up market.

The buyers that are afraid to buy are the ones that don’t know if their jobs are secure.    In order to really move forward in real real estate recovery people need to to feel confident that the economy is stabilizing and their paycheck is not going to be jeopardized.  A $8,000 credit does not do much if you can’t make the mortgage payment.

I personally think that we need to consider making an impact on the higher end market.  I think extending the tax credit to all buyers and also through 2010 could make a significant difference.  At the same time we need to make reasonable interest rates available for jumbo loans (loans over $400,000)  This could go a long way in helping homeowners step up.

I’ll add one more thing.  You can say what you want about short sales.  You don’t have to like them.  I am not fond of them however if banks could some how step up the processing rate of a short sale then some homeowners could stay out of foreclosure and purchase another home which is more affordable.  I think this is a win win situation.

Currently the National Association of Realtor s is looking into legislative options to provide an extention of the first time home buyer tax credit.  I support this action.  What are your thoughts?