U.S. House is Housing’s New BFF

The U.S. House approved a bill yesterday that would extend the $8,000 home buyer tax credit through December 2010 for military personnel serving away from home in 2009. In addition, the bill would eliminate the current tax credit repayment penalty if military families receive government orders to move within the first three years of homeownership.

Co-sponsor of the legislation was U.S. Rep. John Tanner, D-Tenn.

U.S. Rep. ED Whitfield, R-Ky., said in a news release, “Homeownership has long been a cornerstone of the American dream. The brave men and women who serve our nation abroad should be given every opportunity to make this dream a reality.”

 Keep your fingers crossed that the Senate will give this important bill its blessing as well. 

 Thank you to the men and women of the U.S. House for being housing’s new best friend.

 On a similar note regarding the home buyer tax credit, I was recently interviewed by a local newspaper regarding Home Creations’ experience with buyers taking advantage of this wonderful $8,000 free government opportunity. Read on for the questions and my answers.

1. How would you say the OKC market has responded to the tax credit? The Oklahoma City real estate market is blessed with reasonable pricing that puts homeownership in the hands of many people who wouldn’t be able to afford it in other states. I hope I’m speaking for all local builders and Realtors by saying that the tax credit has been a blessing to the local housing market in 2009. Home Creations sales numbers have been unbelievable. By July of this year, we had sold as many homes as we did for all of 2008. I’d say that about 75 percent of our buyers are first-timers taking advantage of the tax credit.

2. How have price ranges above the first-time range responded? We have homes from the $120s to the $250s, with our average price around $148,000 for 1,550 square feet. It’s not unusual for us to have first-time buyers purchasing a $175,000 home, and then we have families purchasing their 2^nd home in the $130s. In our market, we have a greater pool of buyers for homes priced under $175,000 than we do for homes priced above $175,000.

3. What will happen to the market here if the credit expires and Congress doesn’t renew it? In September 2008, down payment assistance was eliminated, and we feared that buyers would be forced out of the market. Fortunately, that didn’t happen. Then the government increased the down payment from three percent to three and one-half percent in January. That didn’t stop buyers, either. While we’d be disappointed to see the tax credit go away, we know that buyers will continue to find ways to purchase a home and take advantage of the numerous homeowner benefits. I saw a recent statistic that said this year’s tax credit accounts for almost 400,000 home sales nationwide. That’s amazing.

We were excited to see the U.S. House approve a bill Thursday that would extend the tax credit through December 2010 for deployed military families. The bill also removed the tax credit’s three-year repayment penalty for military families forced to move by government orders. If the Senate passes the bill, that will be a big boost to VA home buyers. Home Creations remains optimistic.

4, What’s the rush? Why should people act now? It typically takes a minimum of 30 -45 days to close a home loan once a purchase contract is signed. Right now, buyers have less than 50 days to make the Nov. 30 tax credit deadline. There are many players in the home-buying game (buyers, sellers, builders, contractors, mortgage companies, title companies, inspectors, etc), and each player needs adequate time to perform its job accurately. From our perspective as a builder, we can only control our job of completing the homes and making them ready for closing, pending the unpredictable weather. We can’t control how quickly the other players act and get their jobs done. That’s why time is of the essence for buyers to act now if they want to close by Nov. 30. The rush is on. 

Jan Sperry Astani
Marketing Director
Home Creations