2009/11/Whats Next

The most recent home sales data showed that sales increased over the past couple of months, but that prices are either stagnant or still falling. I believe the first-time home buyer tax credit certainly helped the sales numbers, but I think these buyers would have purchased a home anyway in the next 3-6 months.

So what happens now? I think the next couple of months will slow down as usual, but potential buyers will be out in full force for the first quarter of 2010 since the extended tax credit requires purchasers to have a signed contract by April 30, 2010 and must close by June 30, 2010. The new tax credit was also extended for existing homeowners, granted they’ve lived in their home five of the past eight years. They do not need to purchase a more expensive home and they do not need to sell their existing one in order to be eligible for the credit. However, they can only receive up to a credit of $6500 vs. $8,000 for the first-time home buyers.

Once the credit expires, it’s anyone’s guess as to what might happen, but I think further incentives will still be needed to stimulate the housing market. One idea from a fellow Realtor that caught my attention was making down payments tax deductible. I like this idea because the government doesn’t need to print any more money, it encourages home buyers to save a little more, it’s an incentive for purchasers of higher priced homes and it should make for more qualified loans.

If you would like more information regarding these tax credits and whether or not you might qualify I can be contacted at scott@illinoisrealestate.com or by calling 847-829-0130.