The 'Guide Me Home to San Jose' Blog

The Federal Tax Credit is not just for first time buyers anymore! In case you missed the announcement, on Nov. 6 President Obama signed legislation which both expands and extends the Homebuyer Tax Credit. Welcome news - but do not procrastinate! Word from the innards of the federal forest is that there will be no more extensions after this!

Here are the facts, and just the facts:

• The $8,000 first time buyer tax credit is extended until April 30, 2010.

• There is a new $6500 credit for ‘repeat’ buyers (must have lived in their homes 5 of the last 8 years)

• In both cases, the credit applies to 10% of the purchase price; the value of the home cannot exceed $800,000.

• The full credit is available to single taxpayers with an annual adjusted gross income of up to $125,000 and married couples filing jointly with incomes up to $225,000.

• Purchasers who have binding contracts as of April 30, 2010 would qualify for the credit as long as they complete their transaction within 60 days (or by June 30, 2010).

• For more information, please check out the National Association of Home Builders website at: www.federalhousingtaxcredit.com or www.irs.gov.

With first time buyers and investors competing intensely for homes under $500,000 in San Jose and the greater Silicon Valley market, we continue to have a shortage of homes in most neighborhoods. Interest rates remain low; again, do not procrastinate. With the deficit growing and our international sources of credit beginning to show concern, it is widely commented that interest rates may well rise in mid-2010, and possibly earlier. Since a 1% increase in interest rates off-sets a 10% decrease in housing prices, procrastination could be costly. If you are thinking about buying your first home, or moving for other reasons, the combination of the federal tax credit and low interest rates should encourage you to “make your move” this Spring. Repeat buyers in particular, take note: it may well take 1-2 months to sell your existing home. In order to take advantage of the credit, you must have a binding contract on your new property by April 30 and close escrow by June 30th. The San Jose/Santa Clara County area is seeing more price stabilization as the inventory of homes remains low; smart shoppers will certainly not want to wait. You will find tools for your home search on our website, www.AlteraSV.com.

Posted By: Colleen Badagliacco