Tax Credit Redux?

FOR IMMEDIATE RELEASE

Contact:
Keri VanLandingham
Office Administrator
EXIT REALTY ONE
317-882-1250
keriv@insightbb.com

Tax Credit Redux?

by Mike Schmidt

Indianapolis, IN (Grassroots Newswire) 08-30-2010 --

On some of the news outlets over the weekend there have been rumblings about a potential second homebuyer tax credit program. From what I have heard, it would be identical to the first one, which offered $8,000 to first-time homebuyers and also to those who have been in their current homes for at least five years. Could this be good news …or bad?

The tax credit program that ended April 30th of this year did provide a temporary boost in home sales as well as a boost for those industries that revolve around the housing market. But as the latest housing data from July seems to indicate, it may have done nothing more than place a "false bottom" on the market. Resale and new constructions numbers crashed nationally last month. My data report for Brownsburg's housing numbers in July echoed that crash, as only 36 homes sold that month, opposed to 73 that sold in June. There has been two months in a row of diminished sales since May, which had a high for the year of 82, and which followed five straight months of gains in the number of sales.

From the standpoint of boosting interest and getting people excited about getting back into the housing market, the tax credit worked very well. The drawback has been, I think, that people who had intentions of buying a home anyway simply decided to do it earlier in order to take advantage of the program. That's now left a vacuum in the market. Another tax credit program will just do the same thing. At some point the government is going to have to leave things alone and let the housing market do a natural correction. The funny thing about this is, everyone jumped at the chance to buy in the Spring, partially because they were being told that in addition to the credit program ending, interest rates would start to rise dramatically. Well, interest rates are at ridiculous lows but no one is taking advantage of them. I think this is because people believe that home values are going to continue to fall and they're willing to wait. That might not be a bad strategy, but I certainly don't know where the bottom is, or if we've already hit it, do you? At least in our area, the average sale price has actually shown a slight upward trend since January and has been between $167,000 and $168,000 since March.

I can't say for certain, but perhaps the market has already bottomed in Brownsburg. If that's the case, you might think about those interest rates that are out there right now. Could be that now's a great time to buy.

For more information about EXIT REALTY ONE, please call 317-882-1250. EXIT REALTY ONE is located at 3195 W. Fairview Rd. Suite A, Greenwood, IN 46142.

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