In an effort to stimulate housing demand, President Barack Obama included a tax credit of up to $8,000 for certain first-time home buyers in the $787 billion economic stimulus package he signed in February.

Only buyers of principal residences who make purchases before December 1 and have an adjusted gross income of $75,000 or less (or $150,000 for married couples) are eligible for the full credit.

We are experiencing a boom real estate market starting this March right after the law is in effect. Falling home prices have worked their magic and the tax credit has played a key psychological role in pushing buyers off the sidelines.

The tax credit is one of a number of factors that have worked to bolster the housing market in recent months especially entry level home that is priced below half a million dollar in our area.

The federal tax credit of $8000 to the first time home buyer is about to expire on 11/30/09. Although the credit's deadline isn't until the end of November, buyers may need to make an offer on a house by the middle of October to take advantage of it since it will take about 30 days to close an escrow.

Unless the tax credit is extended by lawmakers, this will be the last chance for the first time home buyer to secure a home at an unbelievable low market price (comparing the price from last year) with a great tax incentive.