A Compromise Has Been Reached on Home Buyer Credit!

This just came in from Rismedia. This should help. RISMEDIA, October 29, 2009—(MCT/The Wall Street Journal)-The Senate has reached a compromise on extending and expanding the $8,000 tax credit for first-time home buyers, a boost the housing industry believes will help it pull out of its two-year-old downturn. While its passage remains uncertain, the agreement would extend the existing credit for first-time homebuyers, worth up to $8,000, while offering a new credit of up to $6,500 for some existing homeowners, Senate aides said. The reduced credit would be available to all homebuyers who have been in their current residence for a consecutive five-year period in the past eight years. Lawmakers in Washington also raised the qualifying income limits to $125,000 for single taxpayers and $250,000 for joint taxpayers, from the current $75,000 and $150,000, housing-industry sources said. Under the Senate compromise, buyers must have sales agreements in hand by April 30, but they will have until June 30 to go to settlement, said the sources. The measure still faces votes in the full Senate and the House. Treasury Secretary Tim Geithner and HUD Secretary Shaun Donovan are in full support of the Senate’s proposal to both extend and expand the first-time homebuyer tax credit and called on Congress to approve key housing measures that include the tax credit. "We welcome efforts taken by Congress to extend the First-Time Homebuyer Tax Credit for a limited period. This credit has brought new families into the housing market and contributed to three consecutive months of rising home prices nationwide," said Secretaries Geithner and Donovan. "In extending the credit, we urge Congress to include strict measures to combat tax fraud and protect responsible homeowners.”

First Time Homebuyer Credits Will Likely Be Extended

It certainly appears that the government credits for first time homebuyers will be extended. The real question at this time seems to be in what form the credit will appear and for how long will they be extended. The following article comes from Dow Jones and came out yesterday evening. It seems this type of compromise is the most likely. By Jessica Holzer, Of DOW JONES NEWSWIRES WASHINGTON -(Dow Jones)- U.S. senators are nearing a deal on a measure to extend the first-time home buyer tax credit through next April and expand it to some buyers who already own a home. Under the deal, certain "step up" buyers who have lived in their current home for at least five years would also qualify for the tax credit, according to lobbyists close to the negotiations. The deal comes amid heavy housing industry pressure to extend the tax credit, which is set to expire Dec. 1 unless Congress acts. The measure, which proponents hope to offer as an amendment to legislation extending jobless benefits, could receive a Senate vote this week. Under the measure, the credit would run through April 30 of next year, though sales contracts in force by that date would be eligible as long as the deal closes within 60 days. The credit would amount to 10% of the sales price, with a maximum of $7,290. The current credit has a cap of $8,000. To qualify, first-time home buyers must make no more than $75,000 a year or $ 150,000 for couples. For step up borrowers, the income caps are $125,000 for individuals and $250,000 for couples. The measure aims to strike a middle ground between two Senate proposals. Sens. Christopher Dodd (D., Conn.) and Johnny Isakson (R., Ga.) had sought to extend the tax credit through June 30 of next year and open it to all home buyers. Meanwhile, Senate Majority Leader Harry Reid (D., Nev.) and Sen. Max Baucus ( D., Mont.) were pushing a four-month extension that would have gradually phased out over next year. It would have applied only to first-timers.

Collin County Real Estate continues to strengthen

August housing numbers for the Dallas suburbs in Collin County continue to show improvement over last year. Allen, Plano and Richardson pending numbers are all well into the 20's with Richardson topping the local charts at a whopping 38%. McKinney and Frisco lag slightly behind at about 17-18 but this can partially be explained by the number of new starts by builders. The pending ratios are an indication of business that will close in the near future. The numbers for all of the communities matched or beat the best pending numbers of the last 13 months. Recent newspaper articles point to the fact that sales are down across Collin County for the year. That much is true. The issue that I have with their findings is that they are not looking at the trends. My expectation is that by the end of 2009 we will see numbers that are comparable or exceed those of 2008 in terms of unit sales. Part of this will be fueled by the first time home-buyer tax credit. A good deal of credit will end up going to the collapse of the financial markets in late 2008. I will be absolutely amazed if we do not sell substantially more homes in the 4th quarter of 2009 than we did in 2008. The other key data that the folks at the Morning News are not looking at is the months of inventory. These numbers have been cut substantially and on the average are a half to full month lower than last year. This indicates a significant change in not only new home inventory but in re-sells as well. I certainly do not want to seem to bullish on the local housing market but we are seeing some positive signs in spite of the fact that consumers are not driving this market. This market is set up to move up quickly once that consumer engine heats up.