Question: Will the tax credit be extended to 2011?
2011 and the First Time Home Buyer Tax Credit
** UPDATE July 2, 2010 – Congress separated the first time home buyer tax credit and National Flood Insurance Program extensions from their original bill and passed them as H.R. 5623 and H.R. 5569 respectively. President Obama signed them into law on July 2, 2010. **
** Please note: the first time home buyer tax credit extension only applies to those who were already under contract as of April 30, 2010. **
Many of you are wondering whether the First Time Home Buyer Tax Credit (set to expire May 1, 2010) will be extended later into 2010 or even all the way into 2011.
All indications point to no. However, Congress and the President could always change their minds, but as of now, there are no plans to extend the First Time Home Buyer Tax Credit to 2011.
For military members deployed outside of the United States for a minimum of 90 days between December 31, 2008 and May 1, 2010, the tax credit is extended on purchases before May 1, 2011 (home must be under contract on or before April 30, 2011). These contracts must be closed before July 1, 2011 (must close on your home on or before June 30, 2011).
photo courtesy of Orin Zebest
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Comments
I don’t see it happening – nor do I think it would be a good thing if it did get extended. My feeling this time around, is that there just wasn’t the same enthusiasm that I saw last November and that’s a problem. The fewer people this incentive incourages to buy, the more expensive it becomes per buyer. I think it’s time for the market to face the wind that it eventually would anyway.
Great post – it reflects a question that’s on a lot of people’s minds – both consumers and agents
Erion – I would be in serious shock if they extended it again. I’d also probably be on the phone to @PhxREguy and you saying “how did they do it?” If they continue to extend the credit, I fear we’ll create a market that doesn’t care and will wait until the next extension. It’s kind of like Chicken Little… “Seriously, this is the last time. No, really.” We keep stringing everyone along with false hope and flat out confusion over when the tax credit will end.
There’s a reason why everyone is still asking if it will be extended. Probably because it keeps getting extended. This time it seems as if it truly is the end though and I certainly hope so too.
When the rumors surface about the possibility (back in November 2009) that they might increase the tax credit, I saw a noticeable drop in activity as everyone waited with baited breath. We don’t need that kind of influence on the housing market anymore.
.-= rerockstar´s last blog ..Question: Can you ask a buyer to pay more for a home than it’s worth? =-.
To what extent do you think the end of the tax credit will effect your market?How has your market performed over the last quater? Down here in Orlando, prices were up 5% and closings were up over 40% over a year ago. Most are attributing it to the home buyer tax credit but I’ve seen some foreign money coming in and I think investors, particularly from Brazil have determined that we’ve hit the true bottom and they are jumping in.
Bill – I don’t think we’ll see much net effect from the credit in San Antonio. I do fear a slowdown after it expires, but I get a feeling from locals that recent sales are more based on “it’s time to get back into housing” vibe than anything else (such as the tax credit).
It can’t be denied that the credit has brought some people out to buy homes, but from my experience in San Antonio it has done more to make people ask about housing than actually buy it. When it was first introduced I had a flood of calls, but they were typically from consumers who didn’t have the credit or the cash to buy a home.
I do know that in some parts of the country the First Time Home Buyer Tax Credit was seen as a bit of salvation from what was happening beforehand, but I’m just not seeing the profound effect here.
.-= rerockstar´s last blog ..New Features at RErockstar.com =-.
Extend the tax credit or let houses sit and rot. It’s that simple. Houses cost to damn much anyway.
Fred – Not sure what part of the country you’re from, but I’m guessing it’s not San Antonio. The only reason I say this is that houses aren’t sitting terribly long (still longer than we’d all like) and the costs have been relatively good here. Even when the boom was taking place, our average and median prices remained at a comfortable level (compared to elsewhere).
The tax credit unfortunately actually helped inflate prices artificially in my opinion. Not so much final sales price, but I saw many overpriced listings come on the market and create unrealistic seller expectations in the run up to the credit’s final days.
The real “tax credit” in my opinion (that must be kept) is the mortgage interest tax deduction. If that goes away, I think we’d see a sharp decline in prices and home sales.
“The tax credit unfortunately actually helped inflate prices artificially in my opinion. Not so much final sales price, but I saw many overpriced listings come on the market and create unrealistic seller expectations in the run up to the credit’s final days.”
Interesting observation. It seems as though any time some adjustments are made, some people see a reason to over price houses. I guess they feel they can start high and bring down the price if needed.
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