Homebuyer Tax Credit
From CR, here is the summary of what’s on the table:
Income eligibility for first-time home buyers stays at $75,000 for individuals, and $150,000 for couples. For move-up buyers, income eligibility is $125,000 for individuals and $250,000 for couples. There is a minimum 5 year residency requirement – in their current home – for move-up home buyers. The tax credit is the lesser of $7,290 or 10% of the purchase price. The credit runs from Dec. 1, 2009 to April 30, 2010, with an additional 60 day period to close escrow. (So end of April to sign contract, end of June to close escrow) Expect bill to be signed by Friday, packaged with the unemployment benefit extension.
1. Buyers and sellers will take the holidays off, and gear up for the mother of all Spring Kicks.
Then the sellers, full of optimism but on their last gasp, goose their list price an extra 5% to 10% so they can move up, but the buyers don’t go for it.
We’ll end up with more over-priced inventory, and a few extra sales.
2. The REO tsunami finally hits, with new listings priced at 5% under comps dominating the market, crushing the hopes of regular selling getting their extra goose.
Either way, the flood of sellers should temper sales prices.