Home Buyer Credits Expired, What's Next for the Market?

Time is running out on the home buyer tax credit. To be eligible for the federal tax credits — up to $8,000 for qualified first-timers and up to $6,500 for certain repeat buyers — houses had to have been under contract by April 30, with settlement by June 30, 2010

Locally, the deadline is pushing people to complete home purchases faster than they might have otherwise. Matt Dakoske of ReMax Bayshore Properties said the tax credit is good for business, though he has some concerns about what will happen post-deadline.

“It’s created a very busy market,” he said. “A lot of people are trying to get business accomplished. It will be interesting to see what happens, what will come on the market after the deadline, whether buyers will still be there,” he says.

Dakoske thinks the market may slow down slightly, but given the economic conditions, he’s guardedly optimistic sales will continue. He compares it to the situation following the end of the “cash for clunkers” program.

“Like the auto incentive program, it will probably slow down some (immediately) following. But it’s our selling time. Prices are right, interest rates are good.”

Dakoske also sees one other cautionary note, the challenge with short sales, where the lender agrees to take a loss on the amount owed on the home to clear it from its books.

“Buyers with short sales are concerned whether they will close by June 30, or will they be back on the (buying) market if they don’t get a commitment” from a lender, he said.

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