Some critics of the new housing bill have opined that it is a "giveaway" to first time home buyers.  Not exactly.  It is an interest-free loan for 15 years.

Here's what I mean.  Individuals who qualify for the $7500 tax credit (or 10% of purchase price, whichever is lower) will repay the amount over 15 years at $500 per year (if the maximum) amount.  By the way, if the buyers' tax liability is less than the amount of credit, they will receive a check from the IRS for the balance.

If the buyers sell the home before the fifteen years is up, the balance of the interest-free loan is due and payable to the IRS.  Even though the buyers are paying back 1/15 of the loan per year, if history is any indicator, those payments will be in dollars of less value than the original loan.  Still not a bad deal.

The market is changing in every area, especially in those areas where change was most needed.  Ask a local Realtor® for help in determining how you can benefit.

By a vote of 72-13 the U.S. Senate passed the housing bill earlier passed by the House of Representatives.  There are a number of provisions in the bill, all of which will help the real estate market in those areas where conditions are the worst.

But even in New Jersey, where the market's decline has not approached the abysmal levels of California, et al., there is a provision that should certainly stimulate activity.  First-time home buyers who close(d) on a home between April 9, 2008 and July 1, 2009, will be eligible for a tax credit of up to $7500.  That's a tax credit, not a deduction.

The difference is that if you have a total tax liability (what you owe the IRS) of, say, $10,000, and you have bought a home in the date range of the bill, your tax liability (what you pay the IRS) can be as little as $2500.  That's huge.

This bill - to be signed by the President next week - will pull buyers off the sidelines, and will strengthen the real estate market significantly.  Other provisions will contribute to this strengthening.  Expect the market to change.

Dismal numbers released yesterday by the National Association of Realtors® should make residents of Somerset County, New Jersey feel a little better about their situation.  At a time when sales declined nationally in June over the preceding month, Somerset County saw the steady improvement I pointed out here a short time ago.  The ratio of buyers to sellers continues to improve, as does the absorption rate (which had worsened for a month in May).

So far this year the average sale price is off less than 1% over the same period last year, even though sale are off 28% over last year, reflecting in large measure the disappointing 34% decline in the first quarter, and the improving in the second quarter to "just" 22% decline.

The point to my posting is that Somerset County is doing better than the mythical "national market."  Moreover, pay attention to your local market, unless your buying and/or selling somewhere else.  Just as Somerset County market numbers mean nothing in Las Vegas, Las Vegas numbers mean less than that in Somerset County.  It's all about your local market.