Although the past few months have shown existing-home sales on the rise, in August, sales eased slightly from July, but are still above year-ago levels. The road to recovery is still tenuous, with additional foreclosures expected to enter the market next year.
The Clock is Ticking
To take advantage of the $8,000 tax credit, buyers must close on their home by November 30.
Although efforts are currently underway to extend the tax credit into 2010, this is currently a hard deadline that is fast approaching. As a Real Estate Broker, as I speak to local home buyers I find that the looming deadline is not much of an influence on purchase decisions right now because of the assumption that the credit will be extended into the new year. In Athens we have noticed a surge in sales within the $100k-$200k price range in the last two months. How much of this is because of the credit?
In the past three (3) months I have seen personally only about 20 percent of my closed business be that of purchases by first time home buyers. This is much lower than the national average of 45 percent of sales last month according to the NAR.
In my humble opinion, we cannot afford not to extend this credit as it is probably one of the few economic "stimulus" plans that has actually pumped money into the economy. As I wrote in another blog post, "The Internal Revenue Service reports that so far 1.4 million families have benefitted from the $8,000 first-time home buyer tax credit. Projections reveal that between 1.8 to 2 million first-time buyers will take advantage of the tax credit this year, and economists estimate that approximately 350,000 of those sales were motivated exclusively because of the incentive.
The tax credit has proven to be an extremely popular incentive. It targets first-time home buyers, who currently represent about 30 percent of current market activity. In addition to benefiting buyers who take advantage of it, the tax credit also contributes to the overall health of the U.S. economy. Economists estimate that each home sale pumps an additional $63,000 into the national economy which also reveals that the housing market is vital to the survival of many different industries. The retail of goods and services like carpeting, furniture, appliances, title companies and insurance, just to name a few, depend on a healthy housing market.
The figures mentioned above would mean that for the $16 billion pumped into the tax credit from Uncle Sam, the result thus far has been a $22 billion stimulus into the economy. Not a bad return on investment!"Contact Uncle Sam today!