D-D-Deflation

There are so many reports and articles about the state of our economy and the future of our economy. It is hard to keep up with the massive amounts of opinions regarding where we stand right now and what it means for the future.

As with all topics that run rampant through the media there are buzz words, new terminology, and down right scary statistics.

But what are the facts?

This information comes from DeflationAlert.com

What is deflation?

It is a general decline in prices, income, and credit. Right now our country is experiencing all three. Times have drastically changed and the shift is toward a time of less credit use- at least in the private sector.

Even though incomes did not increase, the amount of spending did and in order for this to happen consumers relied on credit. For twenty years this was how our economy thrived and not surprisingly, the bubble burst.

This harsh reality has changed the temperament of our country. We went from spend, spend, spend to penny pinching and frugal. I have never seen so many people returning cans and bottles at the grocery store or cutting out coupons to use when going out to eat for dinner. People are paying off debt such as vehicles, credit cards, etc. either by choice or because they must (foreclosure).

Allocating funds to pay off debt instead of pouring money into the marketplace is killing our economy. Therefore, the government is borrowing at a record pace, pouring funds into the economy as fast as it can.

"The action-the destruction of capital through the repayment of debt- is what is causing deflation."

"Over the past 2 years our debt outstanding as a nation has declined! Deflation is already occurring, and more is ahead. As banks continue to fail, and as lenders confront the reality of the loans on their books, more losses will be taken."

What Now?

The stimulus is over. We will now have to see how the real estate market weathers the economy. There is now less incentive for first time buyers to purchase a property. Without the $8000. tax credit many potential buyers may not want to risk purchasing a property in an unsteady economy. Many people are still unsure about their employment.

Sellers may be less inclined to make a move up without the $6500. tax credit. The interest rates continue to be low, but buying a pricier home may be have to wait until we see the economy stabilize more.

That being said real estate transactions will always take place. People have to buy and sell for many different reasons- relocation, death, downsizing for budgeting reasons, etc. There are many parts of Monroe County that continue to have very affordable housing in wonderful neighborhoods with great schools. As stated in the past Rochester has been noticed across the country as a very desirable place to live. Many people complain about the taxes in NYS but our home pricing and quality is unmatched compared to most parts of the country.

Currently there is high inventory of properties on the market. More for buyers to choose from but this can also create a greater number of days on market. Consult with a Realtor who specializes in your area because right now pricing your home properly from the beginning is key in getting a quicker sale for the most money.

Check out the 2 surveys to the right. Your feedback is important to us.

Referral Program

2010 marks our 39th year in business. We are so grateful to all of our clients and customers for supporting us through the years.

To help show our appreciate for referrals we receive, we have a Referral Program.

For every referral that we receive that results in a sale, we put the referring person's name in a jar. The drawing happens in December of every year.

What can you win?

A trip to Key West, Florida.

• 2 airline tickets
• 6 nights in a local hotel/B&B

If you refer someone to Walther Realtors make sure they let us know. You could be spending a nice vacation in the warm and sunny keys.

The Real Estate Stimulus

We are on the second round of the stimulus package to first time buyers and now current homeowners who have owned a residence for at least 5 years. The $8,000 tax credit to first time buyers opened up our real estate market in 2009 and instilled confidence in buyers, sellers, and those who work in the real estate and mortgage industry. A stagnant real estate market in our area received a much needed boost, and homeowners who had been thinking of selling or attempting to sell were able to be successful. I explained to sellers that even though (at the time) they were not receiving a tax credit, the stimulus would affect them because there would be more buyers out there ready, willing, and able to purchase their home. And they were buyers with excellent credit! The stimulus package worked on many levels allowing people to stop renting and make an investment and those who needed to downsize or upgrade to sell their current home and purchase a property that better suited their needs.

The stimulus has been extended and now that the holiday season is officially over, the market is picking up. We hope to see a successful outcome with the addition of the $6,500 tax credit to homeowners or the Repeat Buyer Tax Credit. Another important fact is the owner does not need to sell their current property to receive the credit. They can keep their current residence, purchase another property (i.e. a cottage or summer home), and still receive the tax credit.
Also SONYMA has announced an alternative to their Down Payment Assistance Loans. Advancing the full tax credit towards the purchase of a home, the Tax Credit Advance Loan (TCAL) may be used towards the down payment, closing costs, and prepaid expenses. The borrower will repay the loan from the Federal Tax Credit which they will receive after filing their 2010 tax return. They have until June 30, 2011 to repay the loan in full amount without interest.

We are lucky to have affordable housing in Monroe County compared to other parts of the country. Business Week ranked Irondequoit as one of the “best places to raise your kids.” Low interest rates and the buyer tax credit should give our local economy a surge in confidence. Remember, however that banks and lenders have tightened their criteria for obtaining loans. If you have questions about your credit score or what you can do to clean up your credit, make an appointment with a REALTOR. For more information on the First Time Buyer and Repeat Buyer Tax Credit visit The National Association of Realtors website- http://www.realtor.org