Tax Credit Ending and Maybe For Good

Realtors, Custom Builder company owners, title agents, and loan officers look for another tax credit extension, but economists and senate gives signs that it won’t.

One meeting after another, Realtor, custom home builder, and title agents:  They all believe this tax credit is going to get extended again.  I make one on one appointments with as many people as I can in my industry, to learn and newtork, and each of the aforementioned professionals think it’s not likely.  Until recently, I agreed.  Us professionals in the Real Estate business sometimes have to realize that we are biased and our judgment on decisions such as the tax credit being extended, are sometimes jaded.  Of course us loan guys, Realtors, and title folks are going to say, “the government is crazy to not extend the tax credit”.  Well, yes we do see a lot of buyers that are committing to purchasing a home because of this tax credit, but we are not economists.  We can say that it seems good for our industry, but maybe it just looks that way to us because we like the business it delivers to our doorsteps?  Picking up a crying baby feels good because the noise goes away, but do you just set yourself up for a troubled dependent child when they grow up when you pick them up?  This tax credit may have a feeling of well-being now, but maybe the economists have a Real Estate psychology angle we are not aware of.

Johnny Isakson is one of the Senates most gung ho fans of the first time buyer and move up buyer tax credit, and even he is now ready to see it come to an end, CNN Money reports.  In most situations like this, any situation that involves a politician, I have not been informed on what facts they are basing their decisions on, and I do not necessarily rebel on their decisions as a knee jerk reaction either.  Johnny’s spokesperson in the Senate has said that he does not plan to submit anything to the House to get an extension, and I assume he has good reason.

As you are more than likely aware of, the extension we saw of the tax credit months back was because of the increased positive effect the original tax credit had on the housing market.  Soothsayers, and I’m going to use that term until I have better reason to believe otherwise, soothsayers in the economics and forecasting part of our industry believe that the reason we had a housing slump in the last part of Fall and first of Spring was because people grasped a self imposed theory that since they extended it the first time, they would extend it another.  Therefore, people are taking their time to find a home now.  I just hope there is more behind this thought than a ‘mother’s intuition’.  I would like more facts.

Should the hopeful buyers take a chance and not contract right away in hopes for the tax credit extension? 

Stay tuned, but the word on the street is, the tax credit is not getting extended.  If you are depending on that to buy, you have less than a month now to get a live executed contract…you can close anytime this year pretty much, but need to be contracted on a home before May gets here.