Personally, I believe first-time home buyers were encouraged to buy in 2008 based on falling home prices -- which bumped up the affordability index -- not because of the so-called tax credit.
First-time home buyers weren't the only opportunity seekers in the 2008 market because they found themselves going head-to-head with investors over the rock-bottom prices of REOs and short sales.
The California Association of Realtors reported more than 80% of the sellers in California discounted sales prices to effect a sale, doubling the rate reported in 2004. The good news is by the third quarter of 2008, more than 53% of California home buyers could afford to buy a home.
