Given the discussion online and what I’ve heard from more than one client over the past couple of days, there seems to be considerable confusion about the future of the $8,000 home buyer tax credit.
As of the moment, this tax credit is due to expire on November 30. (And I, for one, would be happy to see it disappear as I’ve discussed earlier.)
According to CNN, the latest plan under discussion would extend the $8,000 credit for first-time buyers through next June 30 and also add a $6,500 credit for non-first time buyers. Supporters of the credits say the bottom will drop back out of the housing market if an extension isn’t passed, apparently believing that the credit was a primary factor in the brisker sales of 2009.
That doesn’t necessarily match what I’ve seen in the Phoenix market. My experience has run much closer to this analysis, from the same CNN story:
Critics, while acknowledging that the credit has helped to generate additional home sales, say it has been poorly targeted and therefore not cost-effective.
They point to estimates that only 10% to 20% of the nearly 2 million homebuyers who will have gotten the credit by Nov. 30 bought solely because of the tax break.
The tax break largely has been an afterthought for the first-time buyers that I’ve been working with. By and large, they were going to buy based on interest rates, on prices and on their own circumstances. Getting a tax credit the following April was a nice bonus but had next to nothing to do with the actual decision.
If you watch Twitter, you’ve likely seen bulletins that the extension has been passed – this simply isn’t true. In some ways it’s feeling like a fait accompli but it hasn’t happened yet.
Simply put, if you’re not under contract already, it’s pretty much too late as most lenders are having a hell of a time closing in 30 days. And November 30 remains the deadline, at least until something concrete passed.[tags]Phoenix real estate[/tags]