The tax credit extension has been signed into law, and now people far and wide are wondering if it’ll create a Monopoly-like run on buying properties and collecting checks.
I was thinking today about how the tax credit extension might affect home buyers in the New River Valley, and I’ve come to the conclusion that there really is no clear answer to that. I know that I’ve worked with a lot of first-time buyers this year, and several of them have said that they would not have purchased if the $8000 was not available to them. For that reason, I know that it had an impact in our area – but that credit was limited to just first-time buyers. This new credit, signed by the President on Friday, provides for up to $8000 for new homeowners, and up to $6500 for people who are changing homes (some restrictions apply). With the stroke of a pen, we’ve opened up pretty substantial credits to the entire real estate buying market. Will it take?
Do not pass Go, do not collect $200. I don’t think so. I’m not trying to be the pessimist, I just don’t think $6500 is going to make someone decide to buy a new house. It will certainly help those who have sold their homes and are looking for new ones, but they would have been looking anyhow so the $6500 is just a nice little Christmas bonus. Overall though, I think we’re likely to look at the extension after it’s expiration date in 2010 and say that the $8000 tax credit for first-time buyers continued to be well utilized, but that the “move-up” component of the extension didn’t hit a home run.
My two cents … that’s why they pay me the big bucks to write this blog. 
What do you think? Will the extension in its’ new form have an impact, or will buyers still buy simply because they needed to buy anyhow?
Photo from woodleywonderworks.
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