Will Congress Extend $8000 Home Buyer Tax Credit? : Palm Beach Gardens Short Sales

by Rodney Forbes on August 25, 2009

Aug

25

$8000 Tax Credit

$8000 Tax Credit

Many of my buyer clients in the PalmBeach Gardens and West Palm Beach areas have been asking about the possibility of an extension on the successful $8000 First Time Home Buyer Tax Credit into next year. With the time frame for getting a home under contract to qualify for the program getting short many homes in the Palm Beach County area are actually having multiple offers presented.

Although I’m advising people to take advantage of the tax credit now because of affordable home prices and low interest rates, my guess is that the tax credit will be extended, maybe even increased, next year. There are still a large supply of short sale and foreclosure homes on the market.

The following is an excerpt from a Wall Street Journal article.

Not only are some legislators (and real-estate industry lobbyists) already pushing hard for an extension of the tax credit, which will expire Nov. 30, but they’re also arguing that it should be increased, to $15,000, and expanded to all buyers, and not just those who are first-timers. The current $8,000 tax credit emerged in the stimulus legislation that Congress passed in February, replacing an existing $7,500 credit that had to be repaid over 15 years.

“Congress is not going to endanger the fragile beginnings of a housing recovery by letting the credit lapse,” said Howard Glaser, a mortgage-industry consultant in Washington, in this story on July’s strong home sales figures in Saturday’s WSJ. The story noted that Senate Majority Leader Harry Reid, who faces a tough election fight next year in Nevada, a state hard-hit by the housing bust, favors extending the credit.

But columnist Kenneth Harney notes in his latest column that Congress faces a number of high-profile issues (health-care, anyone?) that face Congress upon legislators’ return, and those priority issues could get in the way. “On top of that, a tax credit extension would cost billions in lost revenue — a big negative when the federal budget deficit is in record red-ink territory,” he writes.

Meanwhile, there’s an argument to be made that the housing market is now much closer to a bottom than it was in early 2009 or mid 2008, when the previous tax credits were implemented.  The idea behind those credits, in part, was that they would help give buyers some insurance against future price declines. With housing markets nearing some type of stabilization (at least those for first timers), does that rationale still hold? Many first-time buyer markets are now seeing bidding wars and low prices that could be enough to spur demand without any stimulus.

Courtesy: Nick Timiraos of The Wall Street Journal.

With experts predicting an increase in interest rates later this year and housing demand growing due to the factors above it may be the perfect time to buy a home and take advantage of the tax credit at the same time.

If you are interested in buying or selling a home in the Palm Beach County area, specifically Palm Beach Gardens, Jupiter and West Palm Beach, please visit my Forbes Realty website. For frequently updated information on foreclosures, short sales, real estate news and market conditions visit my South Florida Real Estate Report blog. There are many free reports as well as free access to MLS listed properties. You can also call 561-337-4810.

 Rodney Forbes is a licensed Realtor®, certified short sale/REO specialist and broker for Forbes Realty of South Florida Inc. Rodney has co-authored the book “Should I Short Sale My Home?”. Get your FREE copy at www.SouthFloridaRealEstateReport.com

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Comments

I’m betting on an extension of this tax credit as a further incentive for Palm Beach County home buyers to take advantage of short sale and foreclosure opportunities.

Posted via web from rodneyforbes’s posterous

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