I have been holding off on commenting about the effect of the stimulus package on the local housing market until I felt like what they were talking about in Congress until I thought a conclusion had been made….
I think that time is today…and the eventual winner looks to be as follows:
Temporary credit for home buyers: The bill increases the size of an existing temporary and refundable first-time home buyer credit to $8,000, up from $7,500. It also removes the requirement under current law that the credit be paid back if the buyer stays in the home for at least three years. And it would extend the credit’s expiration date to Dec. 1, 2009, from July 1. Those eligible for this credit must have purchased a home after Jan. 1, 2009, and before Dec. 1, 2009.
This is essentially the government GIVING you $8000 to buy a house. Now granted, it is a credit, and will come back to you. One still needs to come up with the money out of pocket…but of your costs, $8000 will be returned to you.
With the dipping of the median price of homes in Jackson county to below $200,000…that is over 4% of the price.
The question now is do I think this will help? Well, it won’t hurt. It has a one year time frame on it. It helps those buyers who may think that prices will continue to decline by giving them a 5% cushion.
But then again…one needs to have a job…a stable job…to buy a house. Also some money in the bank to start with. A more effective way to stimulate the housing market in my opinion would have been to offer this credit to anyone who wants to purchase a house, not just first time buyers. A move up, or move down buyer right now would be motivated by this tax credit to act this year.