Resurrection of First Time Homebuyers' Tax Credit?

It is being discussed.

The Obama Administration is considering resurrecting the first time homebuyer tax credit.  It is still too early to determine if they will, but since the tax credit expired, many have asked us here at the San Diego Real Estate Cafe if incentives for buying will come back.

The tax credit initially started out at $6,500 and was increased to $8,000.  At the end of that, San Diego real estate has seen an additional 2,000 homes up for sale for a total of 12,000 listings compared to the rest of 2010 during the tax credit.  Still not bad in comparison to 2007’s frightening 27,000 listings and scarce buyers.

The Federal Government has rolled out other programs such as Keep Your Home California and Unemployment Assistance Programs 

however these programs are new and we won’t be able to see the benefit for some time.  Additionally they seek to help out homeowners however the Unemployment Assistance, without a reduction of the principal they actually owe on the home, may just be a band-aid for a future short sale or foreclosure.

Those opposed to bringing back the first time homebuyer credit site the federal deficit while those in favor point out that the housing market is a major pillar of the economy which at this time is blowing in the wind and should be secured down.

How would this affect San Diego real estate?

Our home prices went up the fastest during the boom and our home prices were also the ones to crash out the first.  Our belief here is that what happens in San Diego will eventually spread through most of the U.S. although certain areas that do not have the amenities of San Diego may be hit for much longer.

Even in the aftermath of the first time homebuyer credit running out, San Diego is still moving along, if prices go lower, the prediction is that more investors will come out of the woodwork to scoop the properties up.

Real estate has seen many booms and busts, this one is a little more unpredictable and little more severe.  Let’s see if they resurrect the first time homebuyer tax credit and the nation’s housing market.

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