In the Northern Virginia-Washington, DC Metro area, the $8,000 tax credit has been a tremendous incentive that has generated substantial market activity. I’ve recently helped two very young couples, in their early twenties, purchase their first house at a great price. It makes me happy to know that, because they now have a very low mortgage, they will be able to easily move up to a larger house in 5-10 years.

Another couple I worked with had sold their house in another state and relocated to Northern Virginia. Prices at that time were through the roof. As a result, they decided to rent until prices came down. They ended up waiting for over 3 years. When prices finally came down, they were now able to qualify as first time home buyers. As a result of this great timing, they purchased a beautiful house!

The combination of low interest rates, low prices and the tax credit has generated a buying frenzy in this area. Some listings are receiving bids $30,000 over list price after only 2 days on the market! This can only be a boost to the economy–so why discontinue the tax credit? After all, the tax “credit” is the buyer’s hard-earned money.

Because of energy in the market, the competition has greatly increased so that “regular” sellers also benefit. Many buyers are happy to find a regular sale, especially when their only other option is a short sale.

Since it was the collapse of the housing industry that caused the economy to tank, doesn’t it make sense to do whatever is necessary to boost the Real Estate industry? Clearly, the best thing to do is extend the tax credit. In fact, I think a tax credit for all purchasers would help the market. Tax credits have historically boosted economies. A tax credit NEVER hurt the economy. Like I said, its THEIR money!

Its hard to understand why some people compare the home buyer’s tax credit to the recent bailouts. They say, “government can’t “afford” to “give” us a tax credit. No one is given money via a tax credit. People are just keeping more of what they earn. How people spend their own money should be their OWN business, period! If they spend it or save it, both are good for the economy.  We need to have faith that the people will be responsible with their own money. If we are going to fret about how money is spent. . .then let’s keep an eye on Congress, not first time home buyers.

Carol McCarthy ABR
Exit 1st Choice Realty
www.househunterforyou.com
703-338-1129

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