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Homebuyer Tax Credit Best Tool for Sustaining Housing Recovery, Says NAR

Dennis Norman

Dennis Norman

By: Dennis Norman

The best available tool for sustaining the still-fragile housing market is the $8,000 homebuyer tax credit, (expires November 30) and it is essential that Congress extend the credit into 2010, the National Association of Realtors® testified at a hearing of the U.S. House Small Business Committee yesterday.

NAR Regional Vice President Joseph L. Canfora said “the credit is working,” pointing out that the 355,000 to 400,000 transactions directly attributable to the credit made a significant dent in the housing inventory and will help to stabilize home prices. Further, the credit has provided a huge indirect benefit to local governments, shoring up property tax bases in particularly hard-hit areas.

Carole Baras, 2009 President, St. Louis Association of REALTORS(R)

Carole Baras, 2009 President, St. Louis Association of REALTORS(R)

To bring this down to a local level here in St. Louis I spoke with Carole Baras, CRS, GRI, ePRO, the 2009 President of the St. Louis Association of REALTORS(R)  to find out how she thought the homebuyer tax credit had affected the St. Louis market. 

When asked about the homebuyer tax credit and whether it should be extended and expanded to help the St. Louis market, Carole said “we still need some help with getting the Real Estate Market going and getting it to be stable.  This means that the 2nd or move up buyer/seller needs to feel confident that they will be able to sell their home in order to buy. ”

Carole added, “I would like for the congress to pass the continuation of this credit but to include all buyers of residential property.  I do not agree that we need to increase the amount but it would be a great boast to the market if all buyers would be included.  Real Estate needs be to the foundation on which we can build confidence in our financial markets.  BUT we also need to make sure that the interest rates do not start climbing.”

Karen Vennard, 2009 President, St. Charles County Association of REALTORS

Karen Vennard, 2009 President, St. Charles County Association of REALTORS

I also asked Karen Vennard, the 2009 President of the St. Charles County Association of REALTORS(R) what her thoughts were on the homebuyer tax credit and the affect it would have on the St. Charles market if it was not extended by Congress.   Karen said “I would say that we have seen an increase in the number of pending sales in the $200,000 and below market.  Since there is no way to say how many of those are first time homebuyers or investors, I would say that it is likely that many are first time homebuyers.”

Karen added, “I believe the tax credit has made an impact on home sales in St. Charles County and I am concerned that we will see a rapid decline if this tax credit is not extended.  I believe that the economy cannot rebound without a strong housing market and this credit is crucial to that rebound, therefore we must keep the momentum of first time homebuyers going.”

Many housing-related organizations, the Mortgage Bankers Association, the National Association of Realtors, the National Home Builders Association and coalitions such as Fix Housing First have been working diligently to try to convince Congress of the effectiveness of the homebuyer tax credit as well as the need to expand it and extend it. Now we will have to wait and see how Congress is going to react, but time is running out.

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