Are you a would be home buyer? Are you a would be home buyer frantically trying to find a way to purchase before the $8,000 tax credit expires? This might seem like a silly idea at first but maybe you would be better off waiting for the tax credits to expire.
What did he just say, wait for the tax credits to expire? Yes, by waiting for the credits to expire you may be putting yourself in a position to make more than the $8,000 by the way of lower home values.
When the tax credit was set to expire at the end of November we watched pending home sales plummet and not until after January did we see sales start to pick up again as the pool of would be buyers started looking to take advantage of the extended tax credit.
Well we are in that position again but only this time there is no extension to pick up the slack. Now I personally don't think we are going to see a long term slump in housing sale and prices but I do think we will see a short term dip in sales and prices as anxious sellers who's homes did not sell before April 30th will either need to lower their prices or take their homes off the market.
The other big thing to look for is the potential for new foreclosed and short sale properties hitting the market, without Government assistance the banks know they will need to be more aggressive with their listing prices.
I want you to think about something, the last time I bought a new car they were offering either 0% financing or $3,000 cash back. By doing the number I found out that my monthly payment was lower by taking the $3,000 cash and paying 6.5% interest than if I took the 0%. But the best part was that I owned the car for $3,000 less which allowed me to pay the car off in advance. What good is an $8,000 tax credit if you have to pay 10 to 15 thousand more for the home to get it?
So what am I saying, by waiting for the credits to expire you may just be paying a lower value for the home which will make it easier for you to sell in the future plus you will have less competition for the better properties as they hit the new non-government funding real estate market.
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Interesting point. I have wondered the same thing. In our area, right now it is the seller's who are scrambling to attract the attention of the tax credit home buyers bfore the expiration. Your post though, should let soe buyers breathe a little sigh of relief. I have seen some frantically looking - and that is no way to consider such an important pruchase.
There is no doubt in my mind there will be a drop in interest in buying, there will also be a drop in prices followed by the normal upswing of interest as school comes to an end. I have folks that are not impressed by the tax credit and simply are waiting for the right house in the right area. It will be interesting to see what obamanomic's the gov't will respond with when they see the drop in sales and addition of homes to the market from bank's, fannie and so on.
Thanks for the responses. I would be surprised to see a revived tax credit later this summer, especially if the bank inventory goes through the roof. But if you are upper end and wanting to buy I can't see any reason but to wait.