First Time Buyer Tax Credit – Will it be Extended?

As the first time buyer tax credit deadline stands today, you must  close escrow on or before November 30, 2009.  Considering the lack of inventory in San Diego’s lower priced markets, increased time to obtain financing and appraisals, and long delays in hearing back from Banks on offers, time is running out. A recent article in the Chicago Tribune discussed this very question.

It’s one of the biggest unknowns bugging would-be buyers of houses and condos this summer: Will Congress let the $8,000 nonrepayable tax credit for first-time purchasers expire as scheduled 14 weeks from now? Or will the credit get a second life and be extended for another six to 12 months, taking pressure off buyers, realty agents and settlement companies?

That’s an especially urgent matter if you’re a buyer just starting to shop and you see entry-level prices bottoming out or rebounding. The tax credit statute requires buyers to fully close on their purchases –– not just be under contract –– no later than Nov. 30. This doesn’t leave a lot of leeway for people who haven’t yet decided on a specific house and who haven’t nailed down mortgage financing.

Years ago, I used to live in Reno and got pretty good at playing blackjack.  Like most games of chance it is about the odds, and my bet is the the First Time Buyer Credit will be extended.  Of course I have also been known to leave lots of my money behind with the Casino, so take this last statement as an educated guess.  The Chicago Tribune article goes on to say:

There are some early signs Congress may be getting the message. Bills already are pending in both houses to extend the credit for another year. Senate Majority Leader Harry M. Reid (D-Nev.), whose state has been among the worst hit by the housing bust, reportedly now favors an extension of the credit. Sen. Chris Dodd (D-Conn.), chairman of the Senate Banking Committee and in a tight race for re-election next year, is co-sponsoring a bill with Georgia Republican Johnny Isakson that would raise the credit amount to a maximum of $15,000. Meanwhile, both the Realtors and the builders are pushing not only for extension of the credit, but for broadening it to cover all home purchases in 2010.

Both the National Association of REALTORS® and the National Association of Home Builders are doing everything they can do not only to extend the credit, but to expand it.  Talk of an increase to $15,000, or eliminating the first time buyer requirement are floating around.  Again, my bet white the First Time Buyer Credit will likely be extended from 6 months to a year. I don’t believe the credit will be increased or opened up to all buyers, but we can always hope.

Stay tuned for more updates as they happen, but I’m thinking this will go down to the wire before we have an answer.