First-time home buyers benefit from housing slump

In many markets, homes that were once prohibitive now are affordable

“I’m very glad I waited,” Kostas Kalaitzidis said about his recent decision to buy his Arizona home. “People like me are the ones buying in now.” View related photos

Pat Shannahan for msnbc.com By Jane Hodges msnbc.com contributor updated 11:59 a.m. ET, Fri., May 8, 2009 Kostas Kalaitzidis wanted to buy a home when he moved to Phoenix in 2008, but between his modest salary and the expensive market, he couldn’t swing it. What a difference a year makes. ... “I’m very glad I waited,” Kalaitzidis said. “People like me are the ones buying in now.” First-time buyers like Kalaitzidis are dominating the real estate market right now. They snapped up 53 percent of all properties sold during March 2009, up from the usual 40 percent or less, according to data from the National Association of Realtors. While America’s declining home values have wrought havoc on home sellers, owners and lenders, first-time buyers can celebrate the housing market bust, and may even help fix it. The Realtors' group expects first-timers to account for the majority of home sales through the remainder of 2009. Kalaitzidis was fortunate enough to get a new job recently and now earns about $60,000 as a local government public information officer, up from his previous income of $40,000. But salary was a small factor in his decision to purchase, he said. The bigger factor was the nosedive in prices. If his transaction closes as planned, this month he’ll become the owner of a 2,200-square-foot, contemporary home with four bedrooms and two-and-a-half bathrooms. In addition to price drops in most markets, federal tax credits for first-time homebuyers are motivating many to get off the sidelines, Realtors spokesman Walt Molony said. He estimates that tax credits could motivate as many as 300,000 fence-sitters to buy this year. The Internal Revenue Service extended $7,500 tax credits to first-time buyers last year and has raised that to $8,000 or 10 percent of the purchase price for 2009. Read entire article at: http://www.msnbc.msn.com/id/30551169/