I am sure by now that you saw the news from two weeks ago about the first-time home buyers’ tax credit being extended through April 30, 2010 and Congress creating a new credit for people other than first-time home buyers.
This was one of the best scenarios we could hope for. The only way that this could have been better is if it was a $15,000 tax credit for first-time buyers and everyone else, but we’ll take what they passed. More importantly, there are several reasons why this will continue to help the housing market and the economy overall.
First, you have seen me write this before the first $8,000 tax credit really did work. It got people off their couch, in the market, sold homes, put people to work, and stimulated the economy. Second, as I have said before, this crisis started with housing and housing will lead the way in turning the economy around. That’s why this critical legislation needs to be extended. It had a proven track record of success and will continue to benefit the country.
The $6500 tax credit for everyone else is also a strong move to get more people to buy homes. There are some preconditions here like you must have lived in your current home for at least five years before you can upgrade and cash in on the $6500. There are also some income limitations to be eligible for the tax credit, but overall, the incentive will bring more buyers into the market. (To find out all the fine details about the tax credit go to www.firsttimehomebuyerdenverco.com.)
Finally, there are a lot of reasons to buy a home right now: historically low housing prices, low interest rates, plenty of selection, motivated sellers, and cash incentives from the government. It’s almost the perfect storm for buyers. I say “almost” because the one piece of the puzzle that still needs to come around is the loosening of credit for buyers. We need to put pressure on Washington to get the banks to lend out more money with more favorable conditions.
Dan Polimino is a Realtor with Fuller Sotheby’s International Realty. He can be reached at DPolimino@fullerproperties.com and www.coloradodreamhouse.com/denverpost