As if insanely low interest rates, rock bottom prices and a great selection of real estate inventory here in Tacoma weren’t enough of an inducement, here is one more reason to look at buying a home now. There is still a federal credit for first time homebuyers! I suspect most of you didn’t know that. It’s not exactly the same as the popular one from last year, but buyers who have taken advantage of it can’t believe what a great deal it is. It’s an incentive that isn’t doing much for the economy because no one is talking about it. Unlike the $8000 one-time tax credit that helped spur sales in 2010, this is a gift that keeps on giving--an ongoing tax CREDIT of 20% of the interest you paid for the year EACH YEAR. I’m talking about a credit for tax payers who take the standard deduction—e.g. most first time buyers. You need to meet a few requirements, which most first time buyers will. If you want to find out if you qualify, call me. I can put you in touch with Becky, who will be happy to explain the requirements and program in more detail.

This blog is generally about the Tacoma market, but I wanted to write about a condominium project that a high school friend of mine is involved with on the island of Maui. Why? Because as this September weather eventually turns on us, thinking about warm, tropical beaches and fruity drinks is a proven defense. Also, I know several of our clients from Tacoma visit Maui every year. They stay at the same place year after year. This year I want to encourage them, and perhaps you, to stay at Honua Kai and check out the real estate offerings while you are there.

The high points for now are this. Honua Kai is the only new whole ownership beachfront resort to be built in Maui in over 25 years. You can't go anywhere else on island and buy what Honua Kai offers today. They have recently gone through and re-priced all of their suites. Prices start around $400K and values are comparable to what you might find in Seattle or Vancouver for that! Many are nearly half of what they were before the economic downturn. Interest rates make the cost of ownership more affordable and the desirable location also presents the opportunity to place your home in a rental management program. Lastly, some people predict well established destinations like Maui will recover very well in future years. This project in particular is over 70% sold and continues selling strong even through the current economic downturn. Please, if Maui is interesting to you, call or email for more info. tom@thehumegroup.com 253.318.1005.

Anon posted a comment last week suggesting it would be interesting to compare Tacoma's sales ratios with markets traditionally known for being higher end, such as Seattle and Gig Harbor. It turns out Seattle is quite a bit more robust in the higher end (and across the board, really) as the chart shows. Not only are the percentages better, the underlying numbers behind them are larger, at least in the upper price range: 91 pending Seattle sales over $800K, versus just 2 pending sales in Tacoma.

Gig Harbor does not shape up to be a higher end market than Tacoma at all. There are just two pending sales over $800K there and it is bloated with more than twice the number of actively listed properties over $800K as Tacoma. Gig Harbor does seem to be absorbing inventory better than Tacoma in one segment here: $300K to $500K. All in all, they are very similar markets.

Does this mean that what Anon suggests about Tacoma not being an area that could support $400+ homes is true? Maybe to some degree. Seattle is a bigger city with more people and access to high paying jobs and a wider array of opportunities. Therefore, it stands to reason that there are more buyers for expensive homes. However, you get more house for your money in Tacoma or Gig Harbor. I think in a healthy economy there are buyers for Tacoma's mansions and upper end view homes; they just cost less here than in Seattle.

NWMLS numbers for August are out. There is cause for optimism here. It shows Washington state’s pending sales up 26% over Aug 2010, as well as closed sales being up, but it’s way too early to break out the champagne. We are going to continue to see a heavy volume of foreclosures in the coming months.

Now if you have been waiting for just the right time to buy, maybe you should take a look at where we are right now. Prices are down as low as they have been in recent memory. We are not yet seeing appreciation and interest rates remain incredibly low. If you believe The Wall Street Journal, CNN Money, or any of the other articles predicting serious appreciation in TACOMA, then we are near bottom. Right? Didn’t Warren Buffett talk about buying when markets were down? I’ve certainly never seen an environment this favorable in the 16 years I’ve been selling real estate. We’ve hit a point where homes are affordable in comparison with local income levels. We may not be celebrating a full recovery, but it sure is nice to see some improvement! If buyers start to recognize this opportunity, that trend is likely to continue.