Real Estate Agents reading this memo should make every effort to match prospective buyers with new construction projects offering in-house financing. Call all your contacts. Ask if they know of someone ... or perhaps have a son or daughter, now steadily employed (and with a relatively "clean" credit record), who needs a new townhome or "starter" home. If they are saving for a downpayment, tell them "don't wait!" Here's why:

Reason #1: The "Immediately Available" inventory on new homes is shrinking. We have already begun to see some very recent price increases on homes where builders have "found the basement" in pricing and are adding a few thousand to the list price on current inventory. With stricter lending policies in place, fewer spec homes are being built, causing demand to rise on existing inventory.

Reason #2: The deadline for downpayment assistance from third party lenders is September 30th. After that, first time homebuyers will need cash of their own for downpayments. While waiting to save for a downpayment, home prices are likely to rise because...

Reason #3: The federal "bailout" of the secondary mortgage market entities Fanny Mae and Freddie Mac may add to heavy inflation. Today's borrowers will pay back with cheaper, perhaps much cheaper, dollars.

For more information on the largest government bailout in US History, see the statement dated September 7, 2008 by Secretary of the Treasury Henry M Paulson or simply google "Fanny Mae and Freddie Mac bailout" for a selection of commentaries on how this recent federal action is likely to affect you.

Reason #4: Get your first -time buyers in on the $7500 tax credit (matched with a further price reduction from some developers). While this is really an interest-free loan that must be paid back, the cheaper inflated payback dollars ($500/YR for 15 years.) may make this worthwhile for the first year of home ownership. More details on this credit are available here.