Is an $8,000 Tax Credit for Home Buyers Enough to get them Stimulated...?

By
Real Estate Agent with Alameda County - San Leandro, CA.

The Tax Credit passed by congress have given home buyers a better incentive to go out and make a purchase of their first home. But are they stimulated enough to do that? I believe the problem we have is not simply the apathy of the home buyer but rather the confidence level of the average buyer, any buyer of any product.

What I encounter in my small town in San Leandro, California must be typical of the rest of the country. The people I talk to are average Jane's and Joe's who if not unemployed, at this time are simply glad to have a job. We need to seek help for other areas of the economy, so as to restore the confidence that the home buyer has to have in order to sign the dotted line that promises to make payments for the next 30 years. Nobody would even think of doing that not knowing weather they will have a job next week or not. Downsizing, cut backs, pay freezes and lay offs are some of the key words that put fear into the heart of the would be home buyer.  

The Recovery Stimulus Package does have very specific time limits that I as a Realtor would like everyone to know... before is too late! The deadline for this credit is December 1, 2009 and you must stay in the house for a minimum of 3 years before selling it in order to avoid having to pay that money back. There are also income limitations to qualify for this tax break; a $75,000 for single tax payers and $150,000 for married couples.

There are other benefits associated with the new Rescue Package: The new FHA and Conforming loan limits gets restored to the $729,760 maximum they had in 2008. This will help finance higher cost homes particularly in areas where the market is higher than the national average. The side effect of this increase is the possibility of refinancing for troubled home owners facing foreclosure.

And lastly, there is also a proviso for increasing up to $625,500 for FHA backed Reverse Mortgages in the Stimulus Package. This will allow seniors to acquire a replacement property without having to sell their primary residence first. Putting it all together, there is help for first time buyers, increase in limits and availability of FHA loans for middle to higher price ranges plus help for seniors who qualify for a higher FHA Reverse Mortgages to downsize. I would strongly suggest anyone reading this post to check with your CPA or attorney to verify this information.

Antonio & Alexia Cardenas, "The Realtors In Motion" can be reached at (510) 326-4263 www.ListedbyAntonio.com Serving the County of Alameda in the heart of the San Francisco bay area, especially the cities of Castro Valley, San Leandro, San Lorenzo, Hayward, Oakland, Pleasanton & Dublin

Click here to find out more!  

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The Realtors In Motion       Antonio & Alexia Cardenas   

                  "The Realtors In Motion" 

         CRS, GRI, E-Pro Certified. SFR (Short Sales, Forclosure Resource) Serving the east shores of the San Francisco Bay, Alameda county: specially the following cities: Castro Valley, San Leandro, San Lorenzo, Hayward, Oakland, Pleasanton & Dublin.

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Rainmaker
807,039
Lanre-"THE REAL ESTATE FARMER" Folayan
Keller Williams Select Realtors-Buy a home in Washington DC. Sell a home in Washington DC - Bowie, MD
I don't make promises.I deliver results.SOLD HOMES

Antonio & Alexia Cardenas "The Realtors In Motion" Remax In Motion-If only the tax credit for home buyers was the original $15,000 instead of $8,000. But $8,000 is better than nothing. Great post.

Feb 17, 2009 12:09 PM #1
Rainer
21,191
Grace Hanamoto
Intero Real Estate - Sunnyvale, CA
Quality, Knowledge, Professionalism, Experience

Great post.  Personally, I think the root of the problem is that buyers have no concept of nor do they see a "bottom" in this market.  There does not seem to be any price supports and with rumors that government may even modify loan principle in the future, there is no incentive on the part of any buyer to plunk down cash now on a home that may be forceably reduced in price in the very near future.  Perhaps the unveiling of the $50 billion housing relief plan tomorrow will greatly aid in bringing buyers to the table, but we'll have to wait and see. 

By the way, I love the picture on your blog page.  You two have the perfect waltz positions! 

Feb 17, 2009 12:46 PM #2
Rainmaker
325,013
Kim Cameron, CRS
Better Homes & Gardens Preferred Properties - Town and Country, MO
Broker Salesperson, CRS

I agree with Grace...even more, First Time Homebuyers don't know the value of the tax credit in the same manner as an experienced buyer. The $15K credit would have made a serious dent in buyers getting, well...serious!

Let's see how things pan out and hope for improved economy soon.

RE: "Bottom" of the market, I run stats on the market weekly, In our market, homes that are selling are, on average, selling in 92 days in comparison to the avg. DOM for Active listings at 133 days. Homes ARE selling. Just need to educate the buyers on their error in thinking and put the media and all the web sites they are reading into perspective and context.

Feb 17, 2009 01:00 PM #3
Rainmaker
195,279
Antonio & Alexia Cardenas
Alameda County - San Leandro, CA. - San Leandro, CA
"The Realtors In Motion"

Lanre, I agree with you, obviously I was pulling for the $15,000 for ALL BUYERS instead we got $8,000 for 1st time buyers. I guess tomorrow we will see if there is anything else on that package for foreclosures that will help us move this stagnant market moving again.

Grace, You are right about buyers waiting for the bottom to fall even more, that is exactly what most of my would be buyers say right now. Thank you for the kind words about our picture. We are amateur ballroom dance competitors and those are pictures taken in full flight in competition.

Antonio

Feb 17, 2009 01:02 PM #4
Rainmaker
503,040
Lora "Leah" Stern 914-772-4528
Coldwell Banker, 170 N Main Street, New City NY 10956 - New City, NY
Real Estate Salesperson

I think the single biggest factor keeping the first time homebuyer on the fence, and fearful of making their move now, is their job security.  I've had several deals that were in the negotiation stage fall apart because the buyer feared for his job.  The $8000 credit does not go a long way in reversing the effects of job loss.  But, for those that have the jobs, it's a great DEAL.

Feb 19, 2009 01:21 PM #5
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Rainmaker
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