Realtors expect housing tax credit to spur sales - Birmingham Business Journal:

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The tax credit, introduced in February as part of the Americanj Recovery and Reinvestment Actof 2009, is availablse to buyers who have not ownefd a principal residence in the past three It is still too early to tell how much of an impacyt the credit will have. But anecdotal evidence suggests that the legislation already has prompted more interestamongg first-time home buyers. Beverly Sherrard, broker and owneer of Re/Max Action First, said inquiries are up abou t 20 percent in the past four It is difficult to determine how much of the increase stem s from the tax credit and how much stems from the warmer but she believes the tax credit has playeda “I do think it has precipitated some phonse calls,” Sherrard said.
“It will really feed our market as we go into sprinvgand summer.” Brad DeVries, president and CEO of , agreed that therew is increased activity, more so in the form of people driving arounc neighborhoods and touring houses than in He said that a lot of peoplr were waiting to see what would be offered in the stimulus legislation, so they just now are startintg the home-buying process. And for first-time buyers — which account for about 40 percent of all home buyerw in a given year there probably will never be a better scenario in whichto buy, DeVries said. Thesde buyers have no home to sell, a large selectiomn of inventory and lowinteresrt rates.
To top it off, he said, the governmeng is offering $8,000 in free “A first-time home buyer should be jumpingy at this opportunityright now,” DeVries The tax credit is a far cry from what initiall y was proposed in the stimulusw legislation — a $15,000 tax credit for all home But it is an improvement over the $7,500 repayable tax credity that Congress enacted in July 2008. “We did not see the activit we anticipated wewould see” from that DeVries said, adding that many first-time home buyers perceiverd the former legislation as having “strings attached.
” At this Realtors welcome any incentive that will help jump-start the market, whicgh has been hard hit by the recession. This week’ss list of the area’s largest residentiakl real estate firms indicates that most local firms sufferecd significant declines in the number of transactioj sidesin 2008, compared with 2007. (See list on page 24.) Overall uncertainty in the economy and continued job layoff have slowedsales considerably.
Anothere challenge is that it has become more difficul for consumers to get home loan s because banks are requiringy higher credit scores than in the A couple ofyearz ago, about 75 percent of buyers financed home purchasezs through conventional loans, and the other 25 perceng were or loans, said Trisb Segrest, broker for Louisville. That now has flip-flopped, she in part because the FHA loans requir onlya 3.5 percent down paymenty and have more flexible crediyt score requirements.