As of now, the first time home buyer credit expires the end of November. Adding to the difficulty the new FHA guidelines, which require the re-certification of all condo projects, becomes effective October 1st. The sad truth is that unless the buyer is solidly into an escrow right now, they most likely can't get their deal closed in time for the November deadline. The question is what happens to our real estate market if the credit does expire?
I don't know!
My guess is that the lower price "entry-level" homes are going to slow down. They have been what was fueling the recovery (at least in my market). Single family homes in Orange County have not been this low in years! But the question is....have we recovered enough to be sustainable now?
I don't know!
Now as I take first-time buyers out to see homes, they are not talking about the credit....and when I bring it up, they are happily "reminded" of that. They are still out looking, even as I've had to tell some FHA buyers that I don't know if they have time to get it through....and particularly they won't on a new short sale. At least I want them to know the time table so they make decisions based on the home and situation....not the credit, if we make it....GREAT! But if they are counting on it, they might be disappointed.
I have been thinking that is they were going to extend the credit, it would have been done by now. But perhaps it will be a last minute thing, like the Cars for Clunkers. They might even let it expire to see what the market does, and then reinstate if they think it's necessary. Lastly, I've heard they might extend it to all buyers and increase it to $15,000. So we'll see. This credit has been great for first-time home buyers and has allowed buyers to buy, who couldn't otherwise...and sellers to sell who might not have been able to do so.
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