Tax Credit Coming to an End?
February 8, 2010
The First Time Home Buyer Tax Credit of 2009 was given new life late last year. President Obama extended the original credit end date until April 30th for purchases and buyers under contract before then have until the end of June to close escrow and claim the credit. The credit has been a success to this point, helping to drive consumers back into the ailing real estate market.
There has been some talk in the media about 2010 being the rebound year for the economy. Home sales in several areas around the country are up and prices have stabilized or increased. However, foreclosures are still a problem in several states coupled with high unemployment. Considering the overall state of the union, I wonder if the government isn’t considering an extension of the credit into the fall.
Interest rates are still very low and there is plenty of surplus housing available. Consumers have been buying but new inventory coming on the market is still a factor.
What do you think?
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5 Responses to “Tax Credit Coming to an End?”
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I think the first time homebuyers tax credit for $8K has been pretty effective in stimulating activity, however I don’t think the $6,500 “move-up” tax credit has done much of anything. It should be expanded and extended (since it hasn’t even been in place very long). With the so-called tsunami of foreclosures expected to hit in 2010 I think there’s no doubt that both tax credits need to be extended. Some statistics show that up to 50% of all housing activity last year can be attributed to first-time homebuyers. So for the tax credits to end when we are about to get an avalanche of new supply is a recipe for disaster. Action must be taken to prevent the fledgling housing recovery from slipping back into a full-fledged housing crisis.
All real estate is local. Locally I’ve got enough supply to last for two years and sellers will not be getting top dollar till the number of foreclosures and short sales are significantly reduced. How can you ask top dollar for a home in a neighborhood of 120 homes where 40 of them are for sale? Improvement will not happen till the unemployment rate goes down. I think this is a great time to get into the RENTAL business. Where are all the foreclosed with lousy credit going to live? They won’t be able to buy another home for a few years and in the meantime they will be looking to rent.
I have a feeling the tax credit will be extended again. It has def. helped get the market back on the turnaround but I still think there is lots of inventory out there. If all the foreclosures are released like they say are giong to be, that is just going to add even more to the inventory that we are trying to get rid of.
The tax credit needs to be extended again and this time for at least 1 year and preferably 18 months so that the housing market is truly stimulated, people are back to work, and things are moving in the right direction. This last extension of the tax credit was too short to make a major impact.
The tax credit needs to end immediately. Why should everyone who pays income taxes be subsidized down payments for first time home buyers. To extend the tax credit is completed redistribution of wealth. Call me an evil capitalist, I shouldn’t have to pay for someone’s down payment because they couldn’t manage their money properly.