Comments on: $8000 San Diego Home Buyer Credit

By: Milford MA Real Estate

Milford MA Real Estate — Mon, 07 Sep 2009 21:34:06 +0000

The 1st time buyers tax credit has been a big help in my area. This bill has certainly stimulated this segment of the market. I think we will see the date extended. We need to have more 1st time buyers entering the market in order for the move up market to flourish.

By: Geoff

Geoff — Tue, 23 Jun 2009 19:09:12 +0000

The $8000 tax credit to first-time home buyers will probably have a more significant impact where prices are lower. Some places in the U.S. a person can buy a home for as little as $20,000 (Detroit, Indianapolis, etc…) So the $8,000 tax credit is a huge incentive, almost 50 percent of the purchase price. It is still very difficult to buy homes in San Diego CA for less than $300,000, so the $8,000 is far less of an incentive to San Diego home buyers. Increases in home mortgage interest rates will have a much greater impact upon prospective San Diego home buyers than will the expiration of the tax credit. But the tax credit does go a long way toward paying escrow fees, title insurance fees, and discount points to buy down an interest rate.

By: Richey

Richey — Mon, 22 Jun 2009 19:45:52 +0000

I wonder how this will affect sales once its gone.

By: Geoff

Geoff — Thu, 18 Jun 2009 03:40:54 +0000

For now this is intended to be a short-term incentive to stimulate the housing market. The purchase needs to be completed by November 30, 2009. So, assuming a 30-day escrow, the offer would need to be accepted by the end of October 2009. If it is a short sale, then the time to have an offer accepted would be yesterday. Short sales are still taking an average of six months or more to complete in San Diego County.

By: Brian Sussman

Brian Sussman — Thu, 18 Jun 2009 02:57:42 +0000

Has anyone heard about any plans to offer this break for 2010.

By: Geoff

Geoff — Fri, 12 Jun 2009 06:57:46 +0000

CORRECTION: I was quoting a news article that incorrectly stated the date as November 1, 2009. The correct date is actually November 30, 2009 (that is, BEFORE December 1, 2009 not inclusive of December 1). So to repeat, the $8,000 tax credit applies to home purchases completed by November 30, 2009. My apologies for the error. I am amending this post to correct the date. Details about the First-Time Homebuyer Credit are available on the Internal Revenue Service Website: IRS First-Time Homebuyer Credit.

By: Madison homes for sale

Madison homes for sale — Fri, 12 Jun 2009 04:36:01 +0000

Are you sure about that November 1st, 2009 deadline? I thought that in order to qualify for the $8K tax credit the home must be purchased between January 1st, 2009 and December 1st, 2009 inclusive.

By: Geoff

Geoff — Wed, 10 Jun 2009 06:58:43 +0000

Thank you for your very astute observation. 100% financing did lead to some serious abuses, and it definitely contributed to the foreclosure issues that we’ve been facing. But there are differences with the program described here. First, the cash advance on the tax credit is only being offered to home buyers who take new FHA loans through the Federal Housing Administration. These federally guaranteed loans are not likely to be repackaged as mortgage-backed securities, so there shouldn’t be the unexpected backlashes from potential defaults. Also note that the FHA loan program still requires a 3.5% down payment. Down payment assistance may be available to qualified buyers through the state of California (and via bridge-loans in 10 other states), which makes 100% financing a possibility for some San Diego home buyers, but definitely not for all or even for most. Finally, the program is a temporary effort to jump-start the housing sector. To qualify, the purchases must be completed by November 30, 2009. So the risk won’t develop on the same scale as was undertaken by private banks from 2000 to 2005. But it does seem like a great way for first-time home buyers to enter the market in the short term to buy discounted homes in San Diego.

By: David

David — Tue, 09 Jun 2009 22:30:59 +0000

It’s great that the government will help first time home buyers obtain no-down-payment 100% financing loans and I encourage all who qualify to take advantage of the opportunity. But isn’t that what got us into this mess to begin with?