There's been lots of discussion on ActiveRAIN over the last few weeks on the issue of extending and/or expanding the federal $8000 tax credit for "first-time" home buyers.
Now, most of that debate appears to be over. The direction Congress may go is quite clear. They will extend the current credit for six months -- or they will do nothing.
Many ActiveRainers have opposed the whole idea of the credit and any continuation of it. Many have wished for an expansion of the credit: either an increase to $15,000 and/or an expansion of the credit to enable all buyers in all income levels to qualify. Some of us, including me, have advocated a simple extension of the current credit, perhaps with some sort of logical phase-out.
Senator Johnny Isakson (R-GA), a former real estate broker, who authored the original tax credit has had a bill in the legislative hopper that would have both increased and expanded the credit along with extending it for one year.
Last Wednesday, Senator Isaksen joined Senate Majority Leader, Harry Reid and others to introduce a simple six month extension of the current credit.
This was reported on Friday by US News and World Report and today by Inman News Service.
Sen. Johnny Isakson has been quoted as saying: "December through February is historically the worst time for home sales anyway because of the winter months, so with the credit ending November 30, you have a double whammy" on the market."
Mark Zandi, the chief economist of Moody's Economy.com, has estimated a six-month extension would cost the Treasury between $15 billion and $17 billion.
He says that would be money well spent. "If you extended it to mid next year . . . by then the job market will be stable enough that we can allow the tax credit to expire and it won't totally submarine the housing market," he says.
So if you think this is a good idea, you now know what to get behind.
And, if you think this is a rotten idea, you know what to oppose.
May the best side -- that is my side -- win.
***********************
Jim Hale
Principal Broker / Owner
Graduate, REALTOR Institute e-PRO
2012 Member, Million Dollar Club of Lane County
2012 Member, Real Estate Brokers Million Dollar Club
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You never know what Congress is going to do, and it's not done or undone until - well until it is! And even at the last minute, you never know what's going to pop out of that old Congressional hat!
Jim, I think your side will win because it is also my side.
Bill
Patricia - When the leading advocate of expansion tosses in the towel and goes with the Majority Leader to introduce half-a-loaf (which is all the Majority Leader, in a likely hot race for reelection is willing to support) half-a-loaf is the most that is going to come out of the the Congressional oven.
Bill - You and I: a clear majority.
I DO NOT WANT THIS EXTENDED! The only thing I think this will extend is the amount of time it will take our great, great, great grandchildren to repay the dept and only delay the economic housing crash that will follow.
Jim - I think that they will decide to extend the tax credit and hope that housing sales will get better.
Todd - No one welcomes this credit. It has not created demand, it has merely acellerated it.
But it appears to be almost solely responsible for moving the bottom of the price structure into activity and in many places upward movement.
I don't believe it was worth doubling in amount or extending to the whole price range. But neither did it make sense to end it November of this or any other year.
Bob - We are agreed. Thanks.
Good update & comments. We are also seeing the lower price ranges fly off the market with multiple offers. I have one frusturated buyer making offers right at asking price and getting outbid over and over.
Kyste - Boy, it sure takes a leap of faith to offer more than the asking price. It just goes against the grain -- even when it's really what the market demands. Good luck.