Well, it should! But, in many places, like San Diego, buyers are sitting on the sidelines. They are waiting for something, someone or some reason to get into the home buying mode. What could be keeping them from taking advantage of what is, without a doubt, some of the best conditions for buying a new home in the last 10, maybe 15 years? Let’s explore the possibilities.

Mortgage rates are at historic lows. 4.56% for a conforming, fixed rate, 30 year loan, with 0.7 points for an origination fee. This is from the posted Freddie Mac Primary Mortgage Rate Survey, as of July 22, 2010. 15 year loans and adjustable loans have even lower rates!

Pricing continues to climb, evidencing that the pricing pendulum swung too far from the norm and we are seeing a recovery in home pricing. The S&P/Case-Shiller index shows San Diego pricing up 1.1% from April to May of 2010 and up 12.4% from May ‘09 to May ‘10.

Even with the increase in pricing, the fall in mortgage rates has increased Affordability Ratios for home buyers. Daniel Kelley is the lead real estate analyst and portfolio manager of the Fidelity Select Construction and Housing Portfolio, he believes these are some of the best affordability ratios we have seen in the last 30 years!

Add to this wonderful mix of consumer news, that the State of California is still offering up to $10,000 of State Tax Credit for buying a new home. So far, through July 20, 2010, new home purchasers have only requested $66 million of the $100 million tax credit allocation in the form of a tax credit request or the reservation of a tax credit. At the current rate, the $100 million tax credit allocation for new homes should last through the month of August!

Do you need more facts to help you get into a buying mode? How about a 21.9% drop in the inventory of unsold homes? That’s correct, 21.9% decrease from April to May of 2010. Buyers are snapping up the available inventory. Add to that fact, that the relative increase in rental rates and the tremendous increase in affordability ratios has now pushed the rent vs own debate into the ownership category. For many people, it is more financially beneficial to own a home instead of renting one. This will continue to push up the demand for home sales.

So what is holding back people from buying a home? Maybe it’s jobs? It helps to have a job if you want to buy a home. And, for most people, it is not just having a job, but having a job they are confident in and expect to have for the foreseeable future. 90% of San Diego’s employable people have a job. So the big question is … are they comfortable with their job? The answer to that question is very personal and subject to each individual’s level of confidence and comfort.

Maybe it’s down payment. While it is true that most mortgages today would like to see a 10% or even 20% down payment (and that can be a big number for a lot of people), there are still loan programs that offer lower down payment requirements, like FHA and VA loans. And, there are other loan programs available with smaller down payment requirements.

Maybe it’s your credit score, or other financial or buying challenges. There are programs and services available to help potential home buyers clean up their credit scores, deal with other financial challenges or learn how to become a home buyer. We are happy to help. Just stop by one of our new home communities and talk with our professional sales counselors. The home buying should be a positive experience and one you truly enjoy.

“(a)s shown in the numbers below, (has) received First-Time Buyer applications totaling more than $100 million. However, since many of these are duplicate, revised or invalid applications, we will accept at least 28,000 applications. This will insure that we have enough valid applications to allocate the full $100 million. These additional applications will be subject to the availability of remaining credits. We will only issue approved certificates of allocation until the $100 million is exhausted. (Updated 07/01/10) ”

“Once we estimate that we have received 25,000 First-Time Buyer applications, we will update this page each business day with the estimated total number of First-Time Buyer applications received. We will announce the cut-off date on this webpage at least one full day before we stop accepting First-Time Buyer applications. (Updated 07/08/10)”

“We have not processed any applications yet as our computer system is still being developed. Once our computer system is completed, we will provide weekly updates on the number of certificates that have been mailed and the amount of credits that have been allocated. (Updated 06/17/10) ”

The FTB says they received 20,760 requests thru June 29, 2010 for a total requested amount of $105,898,000. And, that thru July 6, 2010, they have received an additional 2,920 requests, bringing the total number of requests to 23,680. The 25,000 request level should occur during the week of July 12th and the 28,000 request level should occur during the week of July 19th.

Request applications can only be made after the close of escrow by a first time home buyer.

For the 2010 California Tax Credit for New Home Purchases, 8,800 total applications for a tax credit application have been received. This number includes 5,950 applications for a tax credit and 2,850 applications for a reservation of a tax credit. The total dollar amount for the 8,800 applications is $57,191,000. This as an average of 880 applications per week. At this rate the $100,000,000 tax credit allocation could last until the end of August.

The new home tax credit is not moving as quickly as the first time home buyer tax credit, but this was assumed when the program was created. First time home buyers are finding today’s low prices and very low interest rates too hard to pass up. While new home buyers tend to be move up buyers and that means they generally will have a home to sell before they can purchase a new home. The extended period of time necessary to sell an existing home, then purchase and close escrow on a new home is considerably longer, hence the slower absorption of the tax credits.

Even with all that additional time and effort, given today’s very low (historically low!) mortgage rates and today’s high affordability index, it is still a great time to be looking at a new home purchase. New homes today are a very smart buy!

This is the lowest recorded interest rate since the survey began in 1970. Lower rates mean lower monthly payments for borrowers, or a larger loan amount at the same monthly payment amount. This provides buyers with more buying power and makes housing more affordable to everyone.

While it is impossible to predict world economic events that may impact the average mortgage rate, it is safe to say, this is one of the best times in our lifetime to consider a new home purchase, from an economic perspective. Home prices have started to rebound in most communities. With today’s buying power and affordability, now is the time to consider a new home purchase.

It is important to note, the original date for entering into a binding purchase agreement has not changed. This extension only applies to those agreements entered on or before April 30, 2010. This extension allows those specific agreements until September 30, 2010 to close escrow and hence, provide the new home owner with the opportunity to claim the “up to $8,000 or $6,500 Federal Tax Credit”.

As of June 15th, the Franchise Tax Board reports they have received 15,220 applications for $78,108,000 of California Tax Credit allocation. At the current rate of applications, the $100,000,000 total allocation could be utilized by early July. However, according to the FTB, “The numbers are overstated as there will be duplicate, revised, and invalid applications included as we have not verified any of the applications. In addition, some purchases may be included twice if we have received both a reservation request and an application for the purchase.”

To help ease the confusion, the FTB has stated they will “…accept at least 28,000 applications…” before the close the program. And, that they will “… announce the cut-off date on this webpage at least one full day before we stop accepting First-Time Buyer applications.” That is good news for First Time Home Buyers in escrow today. It means they may have as much as six more weeks to close escrow and apply for the tax credit, with some hope of getting an allocation.

Unfortunately, the same can not be said for the New Home Buyers Tax Credit. After 6 weeks, only 5,630 New Home Buyers have applied for an allocation or reservation of the 2010 California Tax Credit. These buyers have only used $36,360,000 of their $100,000,000 allocation of tax credit. About one third of the total allocation has been requested or reserved in six weeks. This slower showing is supported by recent news of a home sales slow down in May.

While First Time Home Buyers must have made their purchase decision prior to May 1, 2010 to achieve a closing and hence a request for a tax credit allocation, the New Home Buyer could have been in escrow (approximately 3,700 of them were). But, for those requesting a reservation of the allocation (only 1,930), they must have entered escrow after May 1st. New home sales of only 1,930 in the past six weeks is evidence of the slow down noted in today’s headlines.

The closing of the Federal Tax Credit for home purchases on April 30, 2010, may also be providing some confusion for new home buyers. Or, it may have provided incentive for new home buyers to purchase their homes in March or April to beat the deadline. In either case, First Time Home Buyers are rushing to take advantage of the 2010 California Tax Credit, but New Home purchasers don’t seem to be as motivated.

Rockrose has been the most talked about new sustainable neighborhood in San Diego. This weekend, the Foothills community, the home of Rockrose, will open the Community Recreation and Swim Center for new residents. Brookfield took some of the same efficiency design concepts from Rockrose into the Community Center. The pool will be heated by a solar water heating system and backed up by high efficiency pool heaters. LED lighting will illuminate the site. Water efficient landscaping will adorn the Center and passive cooling systems will help the residents beat the summer heat.

The Community Center embodies the Eco-Savvy theme of Rockrose. And, the Eco-Savvy “…concept aims to create a community that reflects both today’s home buyers’ need for value and their preference for eco-conscious products. Think of it as cost efficient meets energy efficient – and then some,” according to Sarah Yaussi, News Editor for Big Builder Magazine.

We could not have said it better ourselves!

The median home sales price in Southern California stood at $305,000, the first time in nearly two years that the median price has exceed $300,000. The San Diego County median home price rose 15.3% year over year for May 2010. The median priced home in San Diego now costs $340,000, the highest median price since August of 2008. This is the median price for all homes sold in San Diego County, including resales, condos and new homes.

In addition, the number of homes sold in the month of May 2010 was up 19.6%, year over year, for San Diego County. 3,879 homes were sold during May 2010, as compared to 3,242 homes sold in May of 2009. Again, the Federal Tax Credit stimulus was a big driver in this increase in sales.

The 2010 California Tax Credit for new and first time home buyers will continue to provide some stimulus for home sales. However, this program has a limited financial capacity. The first time buyer component of the plan will likely be subscribed by the end of June. The new home component may be available for a bit more time after that.

Job Growth in San Diego County is now positive for three months in a row! While the unemployment rate dropped last month, it still remains over 10%. Government jobs, aided by short term Census workers, lead the job categories in new hires. Jobs in the Trade, Transportation and Utilities category have shown the biggest losses this year.

Inventories of new homes available for sale continue to shrink. At the end of March, there were only 325 new single family detached homes(spread over 75 projects) and 751 attached homes (spread over 41 projects). That totals 1076 new homes currently available for sale, 613 of those homes are in high density condominium towers. Leaving only 463 new homes in suburban type projects. (MarketPointe Realty Advisors) Homes offered for resale are starting to show a growth in volume, driven in part by the near historically low volume available in the 4th Quarter of 2009, and the monthly average price increases throughout 2010.

Mortgage rates continue to drop! 4.8% for a 30 year, conforming, fixed rate loan is now available. The increasing fear of a financial crisis has drive money out of Europe and into the United States. The 10 year Treasury bond has dropped below 3.2%. New underwriting standards for home mortgages has increased confidence in the secondary markets and allowed mortgage rates to fall.

Tax Credits, at the Federal level and the California State level, have provided buyers with incentives to purchase homes. There is some fear that the Federal Tax Credit, which ended on April 30th, may have “pulled forward” buyers that would have been in the market during this summer. There has been a noticeable drop off in traffic at new home communities, and a slowing in sales on the resale side in May. This could be attributed to the closing of the Federal Tax Credit.

Affordability continues to be strong in San Diego housing. Approximately 47% of the families in San Diego can afford the median priced home. While this number is low in comparison to national standards, for San Diego any affordability rate around 50% in the past 40 years has proven to be a signal of a good time to purchase.

Consumer confidence continues to grow. Three consecutive months of growing consumer confidence is a positive indicator for the economy. But, holding back the growing consumer confidence is a dramatic negative turn in the investor confidence. Investor confidence is not directly linked to consumers, but the purchase of a home is the largest investment most people will make in their lives. If their confidence is shaken by anything, they will not make the investment. Troubles with the stock markets, the European financial crisis and world conflicts are also keeping home buyers on the sidelines.

When all this news is taken into consideration, we see a strong potential for new home sales growth, but a fuzzy picture on when it will actually begin. 2009 was the bottom for San Diego real estate. 2010 is a turn around year. We just don’t know if that turn around will happen this summer or at year end.

We captured 47% of the total vote among the 6 finalists. Thank you for your overwhelming support!

The FTB will continue to provide updates on the number of applications for the tax credit they receive on their web site. The updates are usually posted weekly.

The 2010 California First-Time Home Buyers Tax Credit is limited to purchases of resale homes only and the application for the tax credit my only be submitted after the close of escrow. For more information on eligibility and instructions on how to file for the tax credit application, please visit the FTB web site.