The spring traditionally brings a flurry of activity to the housing market. But spring may come earlier than usual this year as the deadline for the home buyer tax credit rapidly approaches.
The home buyer tax credit now in effect provides tax relief of up to $8,000 for first-time buyers and up to $6,500 for repeat purchasers of primary residences. However, the window of opportunity for these benefits is approaching its expiration; buyers must have signed purchase contracts by April 30th, and have closed on their purchase by June 30th (credits were originally set to expire 12/1/09). So whereas the spring season typically kicks off in March and runs hot through May, this year may advance and accelerate the process by as much as two months. According to both the National Association of Realtors® (NAR) and Trulia, a national real estate search engine, the latter half of January and February will be very strong, March even more robust, and April should “really take off.” Many trade-up buyers who in the past would have timed their purchase based on school-year considerations may advance their buying plans.
What does this all mean? If you’re contemplating selling your home, there is the potential for higher than usual traffic between now and the end of April. You may want to consider beginning repairs and home improvements now. Buyers have only thirteen weeks (as of 1/22/10) to sign a contract to buy. For the move-up buyer who has to coordinate closing dates (on both a sale and purchase), the pressure is going to feel even more acute to meet the deadline. And complicating matters, according to NAR, the time it takes to process a home loan is now about eight weeks, two weeks more than it used to take. So, relative to the home buying tax credit, “time’s a’wasting’.’”
Tags: tax credit
