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market gets boost from tax credit Steve Brown, The Dallas Morning News 6/7/09 |
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| Earlier this year when federal
law makers voted to give first-time homebuyers a tax incentive,
they hoped the move would boost home sales. And that seems to be happening. The offer of an $8,000 tax credit -- combined with low mortgage rates -- has lured thousands of buyers to the beleaguered housing market. Keller resident Joe Palacios is one of them. He and his wife are purchasing a new home. "The tax credit was icing on the cake," said Palacios, who's living with friends until the couples four-bedroom Pulte home is finished this summer. "My wife and I were looking at apartments that were going for $1,200 a month. We decided why not go for a home instead?" he said. "With the mortgage rates being down so low, we had to take advantage of the situation." More than half a million homebuyers have been motivated by the temporary tax credit, according to the National Association of Home Builders. And so far this year, almost half of the home sales nationwide have been to first-time homebuyers, the National Association of Realtors reports. The surge in buyers is welcome news in a housing market suffering its worst shakeout in generations. "We are hoping this will help us have a better summer market," said Teresa Costa, a real estate agent with Dallas' David Griffin Realtors. Ms. Costa has been talking up the $8,000 tax credit with potential buyers at an Oak Lawn condo complex she's marketing. "We have three units we put under contract in the last couple of week," she said. "And I think all three of the are first-time homebuyers doing that." Real estate agent Vivian Vance with Century 21 Judge Fite Co. said the tax credit has already made a difference in her business. "I'm telling everyone I know about it," said Ms. Vance, who sells houses in the Grand Prairie area. "In my 28 years in this business, I've never seen an opportunity like this." Some builders are also seeing a jump in sales of starter houses, said Ted Wilson of Dallas-based housing analyst Residential Strategies Inc. "I would expect to see some renewed construction activity at the entry-level price points in the second quarter," Wilson said. "Because not many builders are building spec houses these days, there is some urgency to commit to a house now so that it is ready to close by Nov. 30, when the tax program ceases," he said. The lure of the tax credit and a recent uptick in mortgage rates has been enough to get some buyers off the fence said Scott Sim, Pulte Homes' vice president of sales for the Dallas-Fort Worth division. "You are starting to see a number of things coming into play to get people to buy now," Sim said. "We see a lot of folks who are still anxious and wondering if prices are going to go down further." Nelson Mitchell, president of Fort Worth-based History Maker Homes, said his firm is stepping up its production to provide new homes for first-time buyers. "Our April and May sales were up pretty dramatically from the first quarter," Mitchell said. "I think that's attributable to a lot of things, the tax credit being one of them. "We are pushing it very hard." Mitchell said that the federal homebuying stimulus would have a broader impact on the housing market if buyers could tap into the tax credit funds when they contract to purchase." The Federal Housing Administration last month said it would allow homebuyers to fund certain down payment and closing cost expenses with and advance on the tax credit funds. "Even government has finally figured out that the credit didn't do nearly as much good for housing as they hoped since the buyer has to wait until they file their tax return to get the money and therefore can't use the credit as part of the down payment," said Dr. James Gaines, an economist with Texas A&M University's Real Estate Center. "We are hearing that the credit is stimulating a lot of folks to buy and has contributed to increased sales for first-time homebuyers," Gaines said. Adapted from the Dallas Morning News. |
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