Massachusetts Real Estate

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Home Buyer Tax Credits ~ A Stimulus Package that could Actually Work!

 

Cures for slumping housing market 1st time home buyer tax credit

Housing markets across most parts of the United States are facing their greatest downturn since the great depression.

The National Association of Home Builders (NAHB) has proposed to Congress an additional stimulus package that I believe actually has a chance to make a real difference. This new stimulus package would create a tax credit for the purchase of a home.

 Recently, NAHB chief economist David Seiders told the Senate Finance Committee that "Tax credits for the purchase of a home are a means of eliminating excess inventory, relieving some of the pressure on falling housing prices and ending the waiting-on-the-sideline strategy some potential buyers have adopted in response to overly negative media stories concerning the future of the housing market".

I know here in Metrowest Massachusetts there are plenty of buyers sitting on the sidelines waiting to see what is going to happen in the Real Estate market. Who can blame them? Every week the media presents consumers reasons to remain on the sidelines. Market values of homes have been dropping and the data and activity support the notion that we have not hit bottom yet.

 If I was a 1st time home buyer I would be watching too. Over the last three years home values have dropped approximately 15% in my home town of Hopkinton Massachusetts.

A 1st time home buyer tax credit would get people that are sitting on the sidelines watching, off the dime! The 1st step in reducing current inventory levels is to introduce more demand into the market. Providing an incentive to 1st time home buyers will create a domino effect. Home owners who are waiting to purchase another property and are not able to until they close on their current home would benefit and continue to stimulate the market by purchasing another home.

There are a few other Senators that have proposed similar tax packages. For example, Senator Debbie Stabenow of Michigan has introduced a bill called S. 1988, legislation that provides for a temporary, one-time refundable tax credit for first-time home buyers of 10 percent of the purchase price of a principal residence.

Senator Johnny Isakson of Georgia introduced  S. 2566, a bill creating a one-time $15,000 tax credit for buyers of a single-family principal residence that is a new home or a home in default or foreclosure purchased within a one-year time period.

These new policy's are great because they create demand for housing. These are the types of programs that will make a difference for Real Estate markets across the country. 

*****UPDATE*****

Well it looks like the government has finally got their act together and has provided a meaningful stimulus package. As of February 2009 a 1st time home buyer tax CREDIT has been introduced. As modified in the American Recovery and Re-investment Act, you will find the major modifications shaded.

The chart represents what the lastest package covers including the $8000 tax credit. What must be emphasized is that this is a tax credit and not a loan that needs to be paid back!!

One of the best resources that I have seen on the new 1st time buyers tax credit comes from The National Association of Home Builders website. It is located here at the frequequently asked questions about the home buyer tax credit.

1st time buyer tax credit explained

 

 

As of July 14, 2009 Massachusetts has also instituted a program that allows a 1st time buyer to use the tax credit towards the down payment or closing costs. You can see all the details of this program at Massachusetts 1st time buyers tax credit

 

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About the Author: The above Real Estate information on 1st time home buyer tax credits was provided byRE/MAX Executive Realty Hopkinton Mass Bill Gassett, a Nationally recognized leader in his field. Bill can be reached via email at billgassett@remaxexec.com or by phone at 508-435-5356. 

Have a home to sell in Metrowest Mass? I have a passion for Real Estate and love to share my marketing expertise! 

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I service the following towns in Metrowest Massachusetts: Hopkinton, Milford, Upton, Southboro, Westboro, Ashland, Holliston, Mendon, Hopedale, Medway, Grafton, Northbridge, Uxbridge, Franklin, Douglas, and Framingham MA.

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Bill Gassett is a thirty-two year veteran to the real estate industry. He enjoys providing helpful information to buyers, sellers and fellow real estate agents to make sound decisions. His work has been featured on RIS Media, National Association of Realtors, Inman News, Placester, RESAAS, Credit Sesame and others.

Comment balloon 13 commentsBill Gassett • February 29 2008 04:36PM

Comments

Bill, this is great news if we can get these proposals passed. Maybe we need to contact our representatives and tell them we need this!  There's 75,000 of us just here who could make a difference if we just would do it.
Posted by Linda Scanlan (A Fan of AR) over 11 years ago
Linda - Not a bad idea....This type of stimulus package could make the biggest difference to all of us. It would be well worth the effort.
Posted by Bill Gassett, Metrowest Massachusetts Real Estate (RE/MAX Executive Realty) over 11 years ago

Bill,

This is great news! Learning something new again!

As you know, I work in Southern New England where values have declined by -22%+. The proposed tax credit would be such a relief for cities like New Bedford, Fall River, Taunton and many other areas that have been hit hard.

Posted by Lori Lincoln And Associates, Top Agent Taunton,Dighton Rehoboth &more (Top Agent Serving Dighton Taunton, Rehoboth and more!) over 11 years ago
Lori - It will be great news if it happens :) Lets hope it does! I am sure a package like this would make a 1st time home buyer think twice about waiting.l
Posted by Bill Gassett, Metrowest Massachusetts Real Estate (RE/MAX Executive Realty) over 11 years ago
Bill - Let's see if we get get some momentum behind this. It sounds like the push we need.
Posted by Tom Plant (WINEormous.com) over 11 years ago

Tom - It would be great if NAR stood up and led the charge. Getting some mometum behind one of these bills would be fantastic.

Posted by Bill Gassett, Metrowest Massachusetts Real Estate (RE/MAX Executive Realty) over 11 years ago
Bill~This is an excellent idea. I certainly hope it passes because like your buyers, many are still sitting on the side lines out here. I have noticed more calls on my listings, but the actual sell? Not yet. We need a great positive turnaround in the entire U.S. Enjoy your week my friend!
Posted by Julie Neerings~Lifting Hearts ♥ Building Dreams~ (Agent Referral) over 11 years ago
Julie it just seems like program like this where you are offering a genuine incentive to buy would be a lot more effective than some of the other stimulus packages they are implementing. As an example the new mortgage limits on fannie may loans - how much impact will that have? I say nothing in comparison to what a program like this could do.
Posted by Bill Gassett, Metrowest Massachusetts Real Estate (RE/MAX Executive Realty) over 11 years ago
Hi Bill-yes I think this will helps lots.  we have lots of community programs but the scary part is sometimes when the buyer goes to close the money is not available..  This may be a wonderful alternative.
Posted by Midori Miller, Online Marketing For Real Estate Professionals (Talk 2 Midori, LLC) over 11 years ago
Midori if this was ever to get approved none of us would have to worry about the money actually being there. I know this will be a difficult bill to get passed but it sure would help stimulate our markets.
Posted by Bill Gassett, Metrowest Massachusetts Real Estate (RE/MAX Executive Realty) over 11 years ago
This would be a great incentive to get things moving.  What are the chances of it happening?  Is it still in play?
Posted by brandon over 11 years ago
Brandon as far as I know it is still under consideration. It would be great as it would actually create additional buyers who may not otherwise think about buying.
Posted by Bill Gassett, Metrowest Massachusetts Real Estate (RE/MAX Executive Realty) over 11 years ago

A straight tax credit is much better than a loan that needed to be paid back! Combined with a low interest rate environment this should help some buyer who were on the fence get motivated to buy a home.

Posted by Bill Gassett, Metrowest Massachusetts Real Estate (RE/MAX Executive Realty) over 10 years ago

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