According to John Sebree, Vice President of Public Policy for the Florida Realtors, “Buyers didn’t know when they signed the contract it was going to take the bank four months to close the deal, it’s really not good for the real estate market to have such uncertainty.”

According to Lucien Salvant, Spokesman for NAR, “A lot of lenders weren’t able to handle the influx of loans that came with the tax credit.”

This week, a bill that will extend the Homebuyer Tax Credit deadline for homebuyers that had their purchase agreement signed by April 30th passed 409-5, and now must pass the Senate.  The bill will not only allow homebuyers until September 30th to close their transaction but will also extend unemployment benefits for workers that have been laid off for some time.

Chairman of the House Ways and Means Committee stated, “We owe this to the people who have essentially followed the rules who are caught by a closing date.”

According to the National Association of Realtors (NAR) 180,000 homebuyers that have signed purchase agreements will most likely miss the June 30th closing deadline. Harry Reid, Senate Majority Leader, is pushing for the Homebuyer Tax Credit to receive a three month extension, allowing buyers that have a signed contract an opportunity to finish the sale at a later date.  While the NAR has pushing for an extension for some time, Reid has suggested the extension be added as an amendment to a bill that will allow an extension of jobless benefits through to the end of November this year.

The Homebuyers Tax Credit was a Government incentive that offered a tax credit of up to $8,000 to qualified first time homebuyers and up to $6,500 for qualified homebuyers.  March marked the expiration of the FED program that poured $1.25 billion into mortgage backed securities. The program was developed to keep mortgage rates at or around 5%, however, as the program expired at the end of March, many analysts believed this would cause a drastic rise in mortgage rates. However, the rates have remained at historical lows and many homeowners have taken advantage of these rates by refinancing.

The average interest rate on a 30-year fixed rate mortgage stood at 4.81% last week, down from 4.83% the week before.  Interest rates are closely tied in with long-term treasury bonds and can fluctuate significantly, even in a given day. The European debt crisis resulted in many investors moving money into U.S. Treasury bonds, this shift of funds has resulted in the mortgage rates hovering around 5%.

Many economists believed that the index would show a slight decline, but with the unexpected rise, economists are now thinking this may be a positive sign for the real estate market. The tax credit is scheduled to expire at this end of this month; therefore many contracts may be signed in April, in an effort to beat the deadline.

According to Lawrence Yun, NAR’s chief economist, the index report “may signal the early stages of a second surge of home sales this spring.”

April 10th-11th is the big weekend, and just in time too, as the homebuyers tax credit expires at the end of April!

So, it’s time to start getting prepared! Order your balloons, have contracts ready, stock up on Homebuyer Tax Credit information and get your camera ready as this promises to be quite a sight! For more information on the Florida Open House Weekend, visit the Florida Realtor Website.

Smith believes that the growth of Florida will be slow during the “early years of the new decade”, with the high unemployment rate;  however there are many signs that the real estate market is beginning to pick up across the state.  The population growth of Florida relies strongly on the economy as many people migrate to Florida for a number of different reasons; some are looking for employment, some are looking to retire and many are foreign immigrants. There are also a number of visitors from other states who flood to Florida during the winter months in an effort to escape the cold winters.  According to Smith, “Even retirees are affected by economic conditions because of the housing market,” he says. “If it’s difficult for them to sell their homes, they may have to delay a retirement move to Florida even if that is what they had been planning to do.”

The increase in population in the Sunshine State is just one more sign of economic recovery for the state.  With the low home prices, tax credits and low interest rates, there is no time like the present to purchase your Florida dream home!

Do keep in mind; this number is down nearly 10% from the end of 2009! Although these numbers appear to be declining, economists still believe that these figures indicate another surge of foreclosures that will be hitting the market by the spring of this year.

One drastic change in the market will be the expiration of The Homebuyer Tax Credit, a program that provides an $8,000 tax credit for qualified first time homebuyers as well as a $6,500 tax credit for qualified repeat homebuyers. Scheduled to expire during the spring of this year, the loss of this program could result in a brief surge in home sales by those looking to take advantage of this government program, but it’s not expected to last.

Mortgage rates have managed to remain around 5% due to the FED purchasing $1.25 trillion in mortgage backed securities from Freddie Mac, Fannie Mae and Ginnie Mae. This program is also expected to be expiring by the end of March.

The sequence of these events will leave the troubled market to fend for itself by the end of this year. Do you think the market will be strong enough by then?  Do you think it’s ready to stand on its own two feet?  With all the money the government has been pumping into the real estate market, will it be ready to function on its own?  These are the very questions that many economists are pondering today.

Locally, Florida was one of the last states to recover from the recession, which puts us in a good news/bad news scenario. The bad news is the length of suffering that we’ve endured over the last few years; the good news is that residents of the other states that have recovered will more than likely be vacationing in Florida.

It is forecasted that many visitors will be looking to get in on the tax credit before it expires. And as spring is Florida’s “real estate buying” season, perhaps many will be looking to purchase homes while they are here.

The surge in home sales is believed to be mostly contributed to the federal tax credit for first time homebuyers.  The $8,000 tax credit was scheduled to expire on November 30, 2009, however the federal government extended and expanded the program to continue until the spring of this year.

Two things are concerning economists:

1.  Will the huge backlog of foreclosures turn the home prices downward once they hit the market?

2.  Will the slightly visible recovery in the real estate market make a U-Turn once the FED pulls back support?

Only time will tell…

While the FED is continuing to pump $1.25 trillion into mortgage backed securities, the program is scheduled to end during the spring of this year. The low interest rates are very attractive to homeowners looking to refinance, as well as new homebuyers, who also may be eligible for the $8,000 tax credit.

Freddie Mac collects the mortgage rates throughout the nation on a weekly basis, as interest rates are so closely tied to treasury yields they are subject to change rapidly.