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May 2, 2009 8:05 pm US/Central
1st-Time Homebuyers Give Market A Boost
ST. LOUIS PARK, Minn. (WCCO) ―
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Affordable home prices combined with historically low mortgage interest rates and the $8,000 first-time buyer's tax credit are fueling the sudden real estate turnaround.
CBS
In a quiet, well kept neighborhood, a first-time homebuyer looks to unlock the American dream.
Lara Andahazy-Colo is hunting for her first home. The ninth house on her list is a tiny two-bedroom on a corner lot, priced at $169,900.
Realtor Josh Sprague has been showing a lot of starter homes lately. He walked Andahazy-Colo through the home explaining, "A little eat-in, no dining room but at least you'll have an eat-in kitchen."
Affordable home prices combined with historically low mortgage interest rates and the $8,000 first-time buyer's tax credit are fueling the sudden real estate turnaround.
"I just had an open house with a house that was priced at $114,900 and I had 30 to 35 people come though in the two hours," said Sprague.
The optimism of realtors is supported by hard numbers. Pending home sales have jumped 20 percent compared to the same period a year ago.
Chris Galler heads Minnesota's Association of Realtors and says the housing sector from $100,000 to $250,000 is extremely hot right now. With fewer homes being listed and inventory beginning to sell, starter homes are signaling a badly-needed comeback.
"If you have a solid job, you have a reasonable credit rating and you have a little bit of a down payment, the lenders want to lend to people," said Galler, adding that the financing market is also poised for a turnaround.
As for Andahazy-Colo, the home she toured in St. Louis Park wasn't the dream home she'd hoped for, so she'll keep looking for all the pieces to fit.
"When I find one that I can live in right away that I can afford," she explained.
(© MMIX, CBS Broadcasting Inc. All Rights Reserved.)
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