Realtors: Tax credit extension to help local housing market

Tonia Welsh got a surprise today.

 

When she closes on the purchase of her new home on Dec. 4, there’s a federal tax credit of up to $6,500 coming her way. The Clearwater resident is “up grading” into a newly constructed home in Graniteville, selling her old home two weeks from now.

Viewing a model of what he new home will look like, Ms. Welsh received plenty of suggestions on how to use the money. “I’ll be needing more furniture,” she said.

President Barack Obama signed the bill today that includes tax incentives to prospective homebuyers – extending the benefit for first-time buyers and expanding the credit to existing homeowners.

The $8,000 first-time homebuyer credit was set to expire at the end of the month but now won’t expire until June.

Prolonging the life of the homebuyer credit has been a priority of the real estate industry, which says it has been instrumental in beginning to turn around a market that was a major cause of the economic downturn.

Having the credit available for both classes, new and existing, homeowners will be beneficial to the Augusta market, said Bill Boatman, vice president with Meybohm Realtors.

“Where our market needs to gain momentum is people that have owned a home before – move ups,” he explained. The $6,500 existing homeowner credit will be a needed incentive.

With the new credit taking effect on homes bought after Dec. 1, it has created some delays in existing deal closings.

Ella Perry with Realty Executives said she has two clients who were supposed to close on the purchase of their new homes next week who have now decided to wait until after Dec. 1 so that they can get the credit.

About 1.4 million first-time homebuyers have qualified for the credit through August, and the National Association of Realtors estimates that 350,000 of them would not have purchased their homes without the credit.

“It is certainly going to keep the economy moving,” said Jeff Keller, the broker for Jeff Keller Century 21. “I’m in the poor man’s end of the market. In the (high) price range, people buy by choice. In my price range, they buy through necessity. The stimulus program is a tremendous help to them.”

It doesn’t go into the bank. That credit money goes toward lawn mowers, appliances and other home furnishings, Mr. Keller said.

Seasonally, the next few months are slow months for real estate agents, he said, which should change with buyers trying to take advantage of the credits and the low interest rates and large inventory.

While the tax credit came to a surprise to Ms. Welsh, other home buyers have been eagerly paying attention to Congressional action, Ms. Perry said.

“When we started to hear over the last week or two that it would go through for the re-sale buyers, we were real happy,” Ms. Perry said.

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