Mr Williamsburg, Revolutionary ideas on real estate!Hampton Roads Virginia

The current tax credit for first time and move-up homebuyers is scheduled to end on June 30^th if buyers are under contract by April 30, 2010. There is growing pressure on Congress to renew the tax credit again. The original tax credit was for the first time homebuyer was passed in 2008. It was expanded in 2009 and increased the credit from $7,500 to $8,000 and included a provision for move-up buyers which provides for a $6,500 federal tax credit. To see more details about the tax credit, see one of my earlier columns, “Homebuyer’s Tax Credit Extended and Expanded.” and here

December 2009 saw a huge drop in transactions due at least in part to the fact that the previous version of the housing tax credit was set to expire in November 2009. The tax credit was extended and expanded in November 2009, but not before potential buyers decided to slow their search, thinking that the tax credit would be going away.

Congress is now being lobbied by the housing industry for another extension. The tax credit program has been successful in getting buyers who were considering a purchase to move forward. I suspect we will see a flurry of activity as we get close to the April 30^th deadline to be in contract but I believe additional extensions will take away any sense of urgency the program is creating. If it continues to be extended it is only going to be providing a tax break for individuals who were going to buy anyway.

Depending on who you chose to believe, the tax credit has been wildly successful or a miserable failure in helping the real estate market recover.

I have worked with numerous folks who told me that it was their primary reason to purchase a home. Let’s face it, eight  thousand dollars is a huge chunk of change.

In time the real estate market will self-correct ( without government intervention), albeit not as quickly as most would like. I feel the real estate market should stand on its own without subsidies and government support. If the government wants to support the housing market they should concentrate on developing incentives for lenders to make loans and deal quickly and rationally with short sale requests.( lets see if the new HAFA regulations help)

What do you think will happen to the market and home prices after April 30?

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This post was authored by local resident and REALTOR, John Womeldorf.  John is known around town as Mr. Williamsburg, for both his extensive knowledge of Hampton Roads and the historic triangle, and his expertise in the local real estate market.  His websites, www.WilliamsburgsRealEstate.com  and   www.MrWilliamsburg.com, were created as a comprehensive resource about living in Williamsburg and Hampton Roads, with the hopes of selling a house now and again.  You can reach him at 757.254.8136 or John@MrWilliamsburg.com.

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