Furthering the case for extending the $8K tax creditPosted by Jolenta Averill, Broker on Thursday, October 8th, 2009 at 6:36am.
The countdown to the November 30th deadline for the first-time homebuyer's tax credit is underway and the debate rages on as to whether the $8K tax credit should be extended and even expanded. In a recent poll of 1000 real estate agents conducted by Weichert, 97% favored extending the tax credit (the majority want to extend it until 12/31/10). Below we share other illuminating statistics from the Weichert study and two other recent polls about the first-time homebuyer's tax credit:
proof positive of the degree of success the tax credit has had thus far
the positive impact on sales that extending the credit is projected to have
the perceived negative effect on the housing market that not extending the credit is likely to have
How successful has the $8K tax credit been?
A survey by the California Association of Realtors or C.A.R. produced these key findings about the 2009 First-time Home Buyers Tax Credit Survey:
Nearly 40% of first-time homebuyers said they would not have bought a home if the federal tax credit for first-time homebuyers had not been offered. The proof? The IRS says 1.4 million taxpayers have filed (or amended) their ‘08 income tax returns claiming the $8,000 first-time homebuyer tax credit. NAR projects about 1.8 million taxpayers will claim the credit and that at least 355,000 of eligible sales would not have occurred without the credit.
94% were aware of the federal first-time buyer tax credit.
82% listed the ability to obtain financing as "very important" or "most important."
91% reported low home prices as "very important" or "most important."
26% planned to use the tax credit to purchase home furnishings and 12% planned to use it for home improvements.
Extend the credit, sell more homes?
According to a survey by Zillow, 18% of prospective first-time homebuyers said extending the $8,000 tax credit would be the primary influence on their decision to buy a home before the end of 2010 (about 334,000 buyers from Dec. 1, 2009 to Nov. 30, 2010).
If the credit were extended, 18% called the credit the "primary influence" in their decision to purchase a home, 25% said it would be a "significant influence," and 27% said the credit would have "some" influence on any home buying decision.
Zillow analysis of current market trends shows that, if the credit were extended, a total 1.86 million first-time homebuyers would purchase homes between Dec. 1, 2009 and Nov. 30, 2010 totaling $14.86 billion in tax credits.
Will no tax credit=market decline?
Of the nearly 1,000 agents surveyed in a study conducted by Weichert, 71% reported that the $8,000 tax credit was the single largest factor motivating the buyers they have worked with in 2009 far surpassing affordable home prices (20%) and low interest rates (8%).
92% of respondents think the market will decline if the tax credit is allowed to expire this year.
Agents think expanding the tax credit to include current homeowners would help expedite the recovery for higher-priced homes.
Respondents felt nearly nine times more confident in saying that we are very likely to see a recovery in mid-to high-priced homes in the next one to two years if existing homeowners could also receive the tax credit (61% to 7%).
Please join the millions of Americans, including the vast majority of Realtors, who support the case for an extension of the tax credit by contacting your state and local legislators today.
For information about how to take advantage of the $8K tax credit in effect until November 30th, 2009 to purchase Madison WI real estate please contact Jolenta Averill, Broker|Owner of Lake & City Homes Realty at 608.628.9701.
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Jolenta Averill, Principal
Lake & City Homes Realty