The Senate reached a compromise today to extend the $8000 tax credit for first-time home buyers in an effort to help the flailing real estate market out of it’s tail spin. We’ll see if the bill passes.
The Wall Street Journal reports that not only will the tax credit of $8000 be extended, but that it would also be expanded to some existing homeowners offering a new credit of up to $6,500 for, Senate aides said. One of the qualifying factors in the expanded $6,500 tax credit is that the buyer would have to have been in their current residence for a consecutive five-year period in the past eight years.
Personally, I think the extension comes at a good time (as far as spending tax payers money goes) but the time frame of the extension I’m a little iffy about.
What about the timing of the extension?
The new extension deadline of April 30th, 2010 comes just before the best time of our seasonal market in June & July. So, if their intent is to try and prop up the market through what is historically a bad market (winter) then I suppose I challenge the reasoning behind the deadline for the extension. Any extension should have been through August 2010 where the momentum of spring and summer month sales could carry us into the fall of next year. Or, as some suggested, that it began to phase out from $8,000, to $6,000, to $4,000 and so on over a period of months.
Has the tax credit helped our Boise Real Estate Market?
Some question whether or not the first-time home buyer tax credit has made a dent in the market. Locally, sales are up 8% YTD from the same time last year (re-sale in Ada County). I think it will breath a bit of life into some of the short sales that many agents have been ignoring lately because of the current tax credit deadline of Nov. 30th, 2009. Short sales can take months and many buyers can’t risk losing the tax credit because of missed deadlines. Hopefully we’ll now see them getting some good deals from banks and making those deadlines.
If you’re in the market and hoping to get a tax credit, all signs seem to be pointing to an extension–and why wouldn’t it, our Government is spending money at a rate we’ve never seen before–then you can relax a bit and maybe even get some better pricing through the winter months. Just make sure you the tax credit get’s extended first…duh.
For questions about the tax credit, please give me a call or shoot me an email. I’d love to help you out!
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The tax credit has some parts of Austin booming, especially South Austin. Anything under $200K has been on fire the past few months with multiple offers and over list price sales.
But I worry about buyers becoming addicted to free money. Look what happened to the auto industry post 9/11, where discounts and specials became the norm and it became hard for dealers to start selling cars like “normal” again.
I wish they would not extend the tax credit. Let’s see if the market can hang in there. Eventually we have to stop giving away tax money to people.
Steve