In an effort to jump-start a housing market that's in precipitous decline, Senator Johnny Isakson, Republican of Georgia, sponsored an amendment to the economic stimulus package that is making its way through Congress. Under Isakson's provision, homeowners would receive a tax credit of up to $15,000 for any home purchased as a primary residence and would be in effect for one year after the stimulus bill is signed into law. By a voice vote of the Senate, the amendment was accepted unanimously. 

The tax credit would allow home buyers to receive a tax credit of 10 percent of the price of a primary residence, up to $15,000.  

Some leading economists are criticizing the amendment, saying that this will lead to yet another artificially-induced boost for the housing sector, the same kind of faulty impetus that led to the housing bubble -- and burst -- that we are trying to claw our way out of now.  

But according to Mr. Isakson, a former real estate broker, his proposed amendment is modeled after the $2,000 homebuyer incentive offered in 1975 that helped lead the country out of a recession.

Said Mr. Isakson at a news conference, “We do have a history in this country with housing and it goes back to the crash of 1974, which actually in terms of inventory and price declines was comparable to what’s happening now,” 

“Within one year of the inception of that tax credit, two-thirds of the available inventory that was on the market was gone. The market moved back to a balanced inventory, values stabilized and things became very healthy. The only reason I know all of that is I was selling houses in 1974, that’s what I was doing to feed my family and make a living.”

I do wonder what the effect of the tax credit would mean to North Georgia mountain real estate. Would it have that much of an impact given that the incentive is for primary residences, and we are primarily a second-home market? I suppose that any kind of housing stimulus would mean more money in second-home buyer's pockets.

When all is said and done, I am hoping that Mr. Isakson's plan works as well now as it did in 1975, and that the clouds are finally parting for the real estate market.

The economic stimulus package is still being voted on, so it remains to be seen whether or not this amendment makes it into the final bill.  This would be a good time to contact your Congressional representatives to voice your support for the amendment.