Home Buyer Tax Credit Might Be Extended and Increased to $15,000....

I haven't posted here in awhile - since I've been swamped all summer with a large amount of home buyer clients (that are smart enough to seek out the best representation for buyers (we are unique in that we never represent sellers) and best RE negotiator in the Chicago area w/no dual agency conflicts of interest.)  

Interestingly - most of our clients are very analytical. Why?  Thay analyzed what the best form of representation for buyers is in Real Estate - Exclusive Buyer Agency (meaning the agent and their company never represents sellers - ever)   They read about it in Consumer Reports, Money Magazine, Suze Orman, Kiplinger's Personal Finance, the WSJ, etc.

So now - legislators are talking about extending the home buyer tax credit.  More than 1.4 million Americans have already claimed the new tax credit for first-time home buyers, according to a report from the Internal Revenue Service.  So - the uptick in housing was entirely artificially created....

While a new credit may continue to artificially boost sales - I see it as a bad idea and a waste of the taxpayers money.  Just let the market be the market.   Things adjust - an equilibrium is established - and then things turn.

This goverment rebate to buyers - ironically - just delays a housing recovery...

Senator Isakson, a former real estate broker - has become a leading voice on housing market issues, had introduced his own bill several weeks ago. That would  extend the credit for a year - and would allow all homebuyers, not just first-timers, to claim it, as long as the property is for a principle residence. The bill would also increase the tax refund to as much as $15,000.

The house bills all extend the deadline through at least the end of December 2009 and two of the bills, introduced by Howard Coble, R-NC and by Dan Burton, R-Ind., would have it run through 2010. They would also open it up to all homebuyers.

There has already been $14 billion allocated to the program -- and any extension would surely cost billions more. Finding that money may be very difficult. 

The current credit applies to sales as of January 2009, is good for 10% of the price of a home, up to $8,000, and supporters assert it has helped stabilize the housing market (which it has).   It's available to anyone who has not owned a home for three consecutive years prior to purchase, and to qualify for the full credit buyers must be purchasing a primary residence, and couples can earn no more than $150,000, while individuals must make less than $75,000.

The credit has been an important stimulus tool for two reasons. It's fully refundable, meaning that even if buyers owe no taxes whatsoever, they'll get an $8,000 check from the IRS. And this refund will put money in consumers' pockets for good, as opposed to the $7,500 first-time homebuyer tax credit that could be applied to sales made between April 2008 and July 1 2009.

Buyers must close on their homes before Dec.1. But because much of the recent uptick in home sales has been attributed to this tax credit, housing industry advocates worry that the market could quickly turn down again after the credit expire.

I disagree.  The market will adjust fairly quickly.  Price fixes everything.  Ultimately - it is the market that must adjust. Rates seem to be headed down a bit again - which can only help pricing...  Rates are the key - not artificial props.

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If you are thinking about buying / purchasing a home in the Chicago Illinois area, you should ensure that you have an agent that is on your side – looking out for your best interests.

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