California’s Real Estate Tax Credits Drives Buyer Frenzy
As many of you know if you have qualified for real estate tax credit and you were approved by the 30th of last month, you are eligible as a first time buyer for $8,000 credit and 6,500 for home owners if you will close the deal before the 30th of June, 2010.
Last Saturday the new legislation took effect allowing up to $10,000 as well as dual incentives for some and that could be a nice $18,000 tax credit. The trick is to time the purchase and be eligible to receive the incentive.
The timelines and deadlines have resulted in a spike of buying frenzy where people are searching for affordable properties that will allow them to take advantage of the tax break. Some folks spend hours online looking at listings, taking notes, calling agents, calling lenders; it’s like a fire sale.
In Los Angeles alone home seekers have opened contracts on 911 houses in March and this is a 32.2% increase in comparison to March 2009. In 190 contracts on houses in Santa Ana in March, an 8% increase from the same month of a previous year. In San Diego, buyers opened contracts on 721 houses in March, a 7.5% increase from March 2009. These numbers provided by California Association of Realtors.
Dean Baker, co-director of the Center for Economic and Policy Research have stated that, “We had a serious uptick due to the tax credit, but whatever boost that gave us is now at the end,” “So I think we will see resumed declines. The only real question is how fast.” These are sobering words but for those who managed to squeeze in the time line and get the tax break, congrats folks, we wish you luck! Same goes to real estate agents and brokers who have to do with piles of paperwork and stringent financing approval guidelines, well done!
The race for the closing before the June 30th has begun. Agents get your paperwork in pristine shape and check everything twice. It’s crunch time.
