First time home buyer tax credit

We've finally had some movement on this issue. Yesterday evening the Senate approved an extension of the tax credit, there is no word on the details at this point. It now moves on to the House. Based on a few articles I've read it appears that the House will also go ahead and approve it, but we'll have to wait and see.

I think this is good news for the market. We've seen sales soar this year, largely thanks to the first time home buyer tax credit. Low home prices definitely played a roll as well. In fact, homes for under $200,000 have sold so well that the inventory in that price range dropped to a point where we only had a 3 month supply. Compare that to the 350-500k price range where we have a 12 month supply.

As the article in the link above states, there is no indication on the specifics of the extension (ie: how long, amount, only first time buyers or opened to all buyers). It will be interesting to see the details. One article I read, indicates that they were working the idea of having it be 8k for X amount of months, dropping it to 7k for a month, 6k the next, and so on. Personally I think that would be a great move. What we've seen in the last month is a huge push of buyers trying to get offers in and accepted so they can be closed by Nov. 30. With a monthly reduction we won't see so many panicked buyers trying to purchase at the last minute. This should equate to better service from lenders and title companies, many of whom are backed up trying to get everything through by the end of November, causing more stress and problems than necessary.

What I don't want to see happen is the amount get raised for two reasons, one personal, the other professional. Let's go with the personal first. I bought a house this year and will be receiving the 8k, it would piss me off to no end that I could have gotten more (much like what happened to more than one of my clients who received the original 7500 tax credit that they have to pay back, but that's a whole different can of worms). The second reason, the professional reason, is my concern for the future market. I'd hate to see the market get artificially propped up again only to find ourselves behind the eight ball two years down the road.

Check back over the next week or two for any new developments with the House vote.