Is the rush for the tax credit slowing?

Real Estate Agent with Re/Max Premier Realty, Inc.

It seems that today is the first Saturday in quite a while that my phone hasn't rung off the hook with buyers trying to land on a home to close before Novermber 30th in order to receive the $8000 tax credit.

Hopefully we will hear an approval for an extension soon and get a second wave of buyers to clean up some of our excess inventory. I know that tax credit helped our lower end market quite a bit. It did create a lot of enthusiasm for the bargains that we have. Let's face it. Sometimes the government actually does something right.

With our 3rd quarter foreclosure rate results made public last week, now would be the best time I can think of for an announcement of an extension and possibly an increase. I do agree that having a deadline did create a sense of urgency, but its time to unveil something to revive the momentum.

According to Realty Trac, the nationwide 3rd quarter increase was the highest foreclosure rate since they began keeping records in 2005. Florida ranked 4th in the nation. First was Nevada, Arizona was second, and California was 3rd. It seems as if these 4 states just keep rotating the order of the top 4 positions.

Here in Marion County the foreclosure filings for September were 731, down from 886 in August. We have to have some sort of stimulus to keep buyers buying or we are headed for doomsville.

On the bright side, the prices are to a point that investors can actually get a cash on cash return of 8 to 12 % on homes now that they buy as rental properties. Some areas are popular and our property management department tells me they have low vacancies.

Maybe an up front tax credit for investor buyers would also help stimulate some purchases. If they could do it for the" Go Zone", why not create a "low zone" Where the properties have dropped over 50% in value from their peak, give a tax credit to investors to purchase. My imagination goes wild when my phone isn't ringing.

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Comments (6)

Bill Morris
RE/MAX Capital City - Austin, TX

I agree that most buyers that were pursuing this tax credit have either contracted for their purchases or decided that it's too late.  Realistically, time is obviously very short.  With this year's delays and complications in the appraisal process and mortgage underwriting, and the possibility of HERA-required delays, I have been advising my clients to schedule closings for November 15.  With Thanksgiving making one week short, and the inevitable end-of-month rush for closings, having that cushion seems like a necessity.  As I have told my clients, "The IRS won't care whose fault it is.  If closing and funding are complete by November 30, you won't get the tax credit."

Oct 18, 2009 01:22 PM
Nancy Deichman

That's a really good suggestion. Most other Realtors are counting on the government granting an extension, but better to be safe than sorry. That's a lot of money to lose out on.

Oct 18, 2009 07:11 PM
Kelli Ryder
OW&T Investments, Inc. d/b/a Allstate Mortgage of Florida - Ocala, FL

It's the government. I read an article on that was posted Oct 20..Housing Sec. Shaun Donavon says they would not release whether or not the extension would be granted for a couple more weeks.  Realistically I think we all know that probably means Nov 29!  However I know Senate Banking Chairman Christopher Dodd is pushing to extend to June 20150k for single filers and $300k for Joint and eliminate the clause limiting to those who have not owned a home in the last 3 years.  It would be nice if they would add an option for an investor buyers!!!

Oct 22, 2009 11:30 AM
Nancy Deichman
Re/Max Premier Realty, Inc. - Ocala, FL

Thanks Kelli! Yes that would be good and I hope it happens!

Oct 22, 2009 12:53 PM
Nelson Acosta
Ocala, FL

Well hopefully they extend it longer than even proposed and include an option for investors as Kelli mentioned.

Oct 28, 2009 03:13 AM
Nelson Acosta
Ocala, FL

Now we move on to the tax credit extension and anticipate the rush.

Nov 12, 2009 10:12 PM