President Obama’s stimulus bill has been a huge success or a dismal failure, depending on whose opinion you happen to be listening to at the moment. Were jobs created? Were jobs saved? Who can truly tell since numbers fly in all directions and are nearly impossible to pin down. One thing all parties will agree on is that a lot of money has been spent
Out of all the many billions, hundreds of billions in fact, a billion here a billion there, pretty soon you’re talking about serious money, some of them were definitely spent wisely. Those wise dollars were spent in the form of tax rebates given to folks who were able to purchase their first home in the past year and a half.
The first time home buyers rebate actually spurred sales of new and used homes nationwide and was reportedly the driving force that kept the building and real estate industries afloat. Coupled with an FHA financing package which called for just 3.5% down payment, the rebate became a serious tool for first time buyers. On a two hundred thousand dollar house the rebate was enough to replenish the buyer’s savings account for the entire down payment. Unfortunately the government couldn’t get their act together enough to just let buyers use the rebate as the down payment. That was too much to hope for I suppose.
The original first time homebuyers bill was set to end in November of 09 but because of being about the only truly measurable success of the entire bailout frenzy, it was extended. As it stands now, if you can get a property closed by the end of April, 2010, you are still eligible for the rebate. There is no reason it shouldn’t be extended again, or indeed that the rebate shouldn’t be expanded to cover all home buyers whether they are first time homebuyers or own several other homes. Yes, there is a small incentive in place, a measly $6,500 all inclusive rebate which so far seems to have had little effect at all on the market.
At one time a fifteen thousand dollar tax benefit was proposed for anyone who purchased any home. That reportedly brought home shoppers out to open houses in Seattle in large numbers according to Seattle brokers I spoke with. Almost as quickly as it was announced it was withdrawn unfortunately. In my opinion that incentive was just large enough to stimulate many new sales. It would have created enough sales, I believe, to shore up the entire housing industry to the point that we would possibly be out of the woods by now. Alas, too many czars spoil the broth and the plan was scrapped.Now is the time. If you are considering making a first time home purchase then get with it. You only have until the end of April to get the job done. FHA rates are still decent. The selection of homes is still decent. Prices are at what might be the lowest we will see since our economy seems to be improving and the tide floats all boats. Prices are likely to increase as supply diminishes. The first time homebuyers train is leaving the station. If you hurry you can still jump aboard. – Mike West
