THE DAILY RAMBLE: The “New & Enhanced” $8,000 Tax Credit
After much debate and wrangling in Washington, President Obama has signed the $8,000 Tax Credit extension into law. While this is welcome news to buyers (and Realtors as well!), it is much more than an extension. Some of the highlights include:
* Extension of the program through April 30, 2010. You must be in contract by that date, and close by June 30. 2010.
* Increase in the income limits to qualify.
*Lived in your current home for 5 out of the past 8 years? You may be eligible for a $6,500 credit for moving up to a new home!
The extension and enhancements are coming at the right time. Over the summer the significant uptick in activity, especially at the low to middle market levels illustrated the power of the Tax Credit to help motivate the market. Lets fact it: buying a $1,000,000 home, an $8k tax credit doesn’t mean a heck of a lot. But, purchasing a $200,000 coop, you better believe it means something!
We saw the positive results of the tax credit over the summer, combined with the pent-up demand of six months of a moribund market, an explosion of activity. With the perceived near-term of the expiration in the fall, the low and middle market cooled.
The new “enhanced” tax credit, combined with the continuing historic low interest rates, should combine to drive a significant upswing in activity. Lets face it, buying opportunities like this come along very rarely:
*Financial incentives from the government to purchase.
*Prices down 15-20% or more in some cases.
*Low interest rates not seen in a generation.
What are you waiting for??!!
The chart that follows, prepared by the National Associate of Realtors (NAR) breaks out the old and new programs so you can clearly see the benefits of the new enhanced program!
