Jason Farmer

With sellers offering incentives, interest rates near all-time lows and tax breaks from the stimulus law, the nation’s bad economy could mean good opportunities for consumers, according to experts.

People in the market for their first home or looking to replace an old car could find sweet deals and savings of thousands of dollars.

“It depends on each individual’s situation,” said Terry Todd, president of FSGBank in Chattanooga. “If you are confident in your situation, this very well could be a buyer’s market.”

The passage of the stimulus bill last month introduced incentives for big purchases, from homes to cars and even RVs.

For shoppers interested in the real estate market, the bill makes first-time home buyers eligible for a tax credit of $8,000. The credit would not have to be repaid. For purposes of the credit, a first-time homebuyer is someone who has not owned a house in three years.

Also, those who qualify for the credit have an option to claim the credit on their 2008 or 2009 taxes, according to irs.gov.

The tax credit combined with historically low interest rates could mean the timing is right for someone who may have been on the fence, said Jason Farmer, broker-owner of ReMax Renaissance Realtors and former president of the Chattanooga Association of Realtors.

“Housing inventory is over 12 months, meaning there’s a whole lot more sellers than buyers. That alone creates a buyers’ market,” he said.

Interest rates are near all time lows and sellers are becoming more aggressive with their properties, Mr. Farmer said.

Market conditions could be attractive these days with low mortgage rates and housing values are at good levels right now, said Dr. Bento Lobo, an economics professor at the University of Tennessee at Chattanooga.

“Reasonably one would expect there would be some kind of a pickup in the housing market, especially the lower end of the housing market,” Dr. Lobo said.

CAR BUYS

Someone wanting to buy a car also could benefit from the problems in the market, Dr. Lobo said.

“For some people it is going to be a good time, because not only are dealerships going to want to sweeten the deals to move inventory, but also the stimulus package has some tax breaks in there that provide incentives for car purchase, so I think it might be a good time to buy a car,” he said.

Some of the sweeter deals are likely to be American-made cars, he said, and people might want to factor that aspect into their decisions.

Though the stimulus is not offering as big a break for car buyers, they were not left out of the bill. The stimulus allows car buyers to deduct from their federal taxes the state sales tax associated with buying a new car, truck, motorcycle or recreational vehicle.

But the biggest incentive could come from car dealers themselves who are coping with slowing new car sales.

“Rates are low, rebates are the highest and financing is freeing up,” said Brad Cobb, who oversees operations of four auto dealerships in the Chattanooga area including Toyota of Cleveland and Volkswagen of Chattanooga.

Some of his dealerships have offered rebates up to $1,500 for some vehicles in an effort to move inventory, he said.