The deadline is quickly approaching for buyers who want to take advantage of the $8,000 First Time Home Buyer Tax Credit. Buyers must close escrow on or before November 30th.
Many buyers are still anxiously hoping to close in time for the credit. There are currently about 1890 pending sales in the Reno-Sparks area for stick built, single family homes. Of this number about 61% are short sales which typically take 60-90 days to close. Buyers will need to consult with their REALTOR if they are concerned about closing in time.
According to Moody’s chief economist mark Zandi, by the time the credit expires it will have been responsible for sales of 400,000 new and existing homes, out of a total of 1.4 million sales. That is about 28.5%. Personally 75% of the buyer transactions I have closed so far this year were with buyers who qualified for the tax credit.
As of today there are only 28 more “escrow closing” days. There are 4 holidays between now and the end of November, and with escrows only recorded Monday through Friday time is definitely of the essence.
Currently there are over a dozen bills presented to Congress to extend the credit. If you are a buyer waiting to close and concerned that you might not close in time, I would highly recommend that you contact your Representatives in Congress and urge them to extend the credit. The National Association of REALTORS estimates that for every home sold $63,000 is pumped into the economy which is the equivalent of one new job. This credit is a win-win for both home buyers and the economic recovery.
A recent Zillow survey found that 70% of prospective first-time buyers said that the tax credit was the primary influence, a significant influence or some influence to their purchase decision. Zillow stated that if the credit were extended it could account for another 334,000 home sales. With increasing foreclosure rates, this could be a major factor in whether or not we see a good year next year or one that has continued negative pressure on prices.
The bottom line is that regardless of whether you have enough time to close before the tax credit expires, conditions are still ideal to purchase a home – low prices and competitive rates. If you get the tax credit – it’s a great bonus!