The National Association of Realtors is putting the pressure on our elected leaders to extend...and even expand..the $8000 tax credit/refund for first time buyers.  Currently the credit is due to expire on December 1, meaning the house sale has to be closed by November 30--which is the Monday after the long Thanksgiving weekend.  Buyers:  do NOT plan on closing that day!

Personally, just over one half of my sales so far this year have been first time buyers.  In 2008, it was well less than half.  So would those first timers have bought anyway this year, if the tax credit was not in place?  Some would have, sure, but most -- I don't think so.  I know the $8000 incentive pushed some fence sitters to sign at the X.  It's also interesting to note that the usual 'move up' market--meaning those persons buying their  second or third home--are not 'moving up' this year.  I've experienced that as well, as possible sellers feel they can't get what they want for thier house so they don't list it, or they list it but it doesn't sell, or they are upside down on their loan due to falling home values or--and I think this is a big reason--they are afraid of a layoff and don't want to risk a larger house payment.

Each of my first time buyers this year not only bought a house, but stimulated the economy in other ways along with it:  they bought furniture, appliances, lawn mowers, home decor; hired a handyman for various home fix up jobs; hired a mover, went out to eat, bought beer and pizza for the friends who helped with the move; you can see the domino effect here.  Perhaps best of all, these buyers realized their dream of home ownership much earlier than they once thought, and they are excited about becoming part of a neighborhood, taking pride in their home's appearance and creating a sense of community you don't have in an apartment rental.

These are the pros of the tax credit.  The cons of extending it?  The cost, of course.  It's going to cost almost twice the projected amount anyway--extending the credit and possibly expanding it will add more debt to all taxpayers.  But like the 'cash for clunkers' deal, the psycological effects of buying a new home can't be priced in dollars so easily.    Just about every buyer I talk with says 'we like to entertain, we like to have friends over'.  That' pride of ownership is worth more than $8K.

The current health care debate shadows everything else in Washington and the rest of the country right now...except unemployment benefits, which have to be extended every six weeks or so.  Don't count on the $8K tax refund extension.

One final word...if you are a first time buyer and you don't buy now--you'll probably regret it next year.  Chances are you won't get a better deal than you can now.

Thanks for reading my blog--comments welcome!  Email me or visit my website maryhutchison.org