If you did not go to contract by today you will not be able to get the $8,000 dollar first time homebuyers credit or the $6,500 current homebuyers credit.
Some will be upset by this, but I would not get too worked up. If there was not any housing inventory remaining there would be a big problem. However, there is still a huge overhang of inventory that is keeping the market down. So there is nothing to worry about there.
Then the idea you will be losing either $8,000 or $6,500 dollars by not hitting the April 30th deadline is also a misnomer. All that was is an artificial bump in the market at taxpayers expense.
Think about it, everyone knew the tax benefit was out there and the pricing of the homes reflected that. Now if you are selling and moving into a rental situation then you may take a hit as you will have to lower your price to make a deal and will not be able to recover it.
But in all reality you will be moving into another home. The sellers of that home are not stupid either and know that the market has shifted down without the government subsidy so you will be able to negotiate a lower price on the home you are buying.
The dirty truth of the government tax credit was that it’s job was to speed up the market and get some excitement in it. Sort of like a sale at a department store, just the government was giving a subsidy to the buyers, not the store or manufacturer.
So housing prices will drop a little after the subsidy runs out, the government will stop giving away our tax money, and we will still go on.
In fact, if you are a buyer right now, you probably will get a better deal. The real estate community hyped the tax credit so much that those that did not sell will probably be nervous and make a better deal.
But we are not supposed to talk about that for at least a couple more weeks…
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{ 4 comments… read them below or add one }
This is so true. People have been overbidding on homes to get the tax credit when they could have waited and probably gotten homes cheaper after the credit expires.
Also, by bidding up homes for the credit, the buyer was actually losing money long term. Sure, they get the $8,000 credit, but they pay more for the house and pay almost an equal amount of the extra housing cost in interest.
This happened with cash for clunkers. Dealers gave no incentives or discounts so people overpayed to get the credit. They could have waited, gotten a better deal, and still been able to sell their clunker (even for a couple hundred dollars or so).
Yep. I'm just happy about the "not giving away our tax dollars anymore" part.
Thanks for reminding us of the silver lining to the "end of the rebate" cloud!
Mary
Waterloo/Cedar Falls Real Estate
I am agreed that prices ofhouses will declined more.Thank you for your article, some people still do not realize that this is a long term situation.
Paul