With Memorial Day behind us, Long Island’s summer season is official—let the fun begin. After a long winter and lukewarm spring, this warmest of seasons could not have come too soon. Lets face it: Summer is a significant—if not the main—reason as to why we all live here. And with it being June, this is a good time to plan in order to take advantage of all that summer has to offer. Given its shortness in length, planning is a prerequisite for summer lest opportunities can be wasted.
Speaking of planning, one of my good friends is an officer in the military, a Major to be exact, and being such he plans for, well, pretty much everything. His training and experiences have ingrained a discipline in him that force him to assess and plot in the hopes of removing all potential variables from a given operation. My friends and I often marvel—and mock—his propensity for planning while the rest of us leave much more to chance. Needless to say, he often has the last laugh at our expense.
He is a proponent of what he refers to as “the five Ps,” which stands for Prior Planning Prevents Poor Performance. This mantra, so to speak, can be applied to a variety of situations and was obviously ignored by many in the real estate community recently, which is why the market is in its current state, but I digress.
These trying times offer a golden opportunity to plan for the future on many levels, both personally and professionally. Though unemployment is high and optimism is low, now is the time to plan to best position for the inevitable economic recovery—and that includes the purchase of a home.
Think about it: Interest rates are low, financing is available and incentives such as the federal Homebuyer Tax Credit are available. If you are not familiar with the latter, the Homebuyer Tax Credit has been around since 2008, but has been modified as part of the American Recovery and Reinvestment Act of 2009. As a result, the credit permits up to $8,000 tax credit for a home purchased by a first time homebuyer. Among the qualifications is an adjusted gross income limit of $75,000 when filing a tax return- $150,000 on a joint return and not having owned a principal residence in the three years prior to purchase.
In the older version of the homebuyer tax credit, there was a repayment requirement. Not anymore, although there is a repayment requirement if the home is sold within the first three years. More importantly, this credit expires at the end of November 2009.
The coming months look like a good time to take advantage of this buyers market. A recent piece in the Wall Street Journal had housing market analysts predicting that the decline in home prices will bottom out by year’s end. Though that may be an optimistic outlook, a recent report from Prudential Douglas Elliman showed housing inventories beginning to decline. Sales are down, the median price for a home on Long Island is down to levels not seen for five years and all of the other market indicators (listing discounts, number of sales) point clearly to it remaining a buyers market for the foreseeable future.
So plan accordingly to take advantage opportunities at hand. Much like summer, they won’t last.