The Woodlands Real Estate

Don't worry... you have 13 days and 11 hours to find the home of your dreams

Kenneth Harney wrote an article for the Washington Post today answering the question that has been discussed with increased intensity recently: “Will Congress extend the 1st-time home buyer credit that is set to expire on November 30th?”

The intensity is due to the contract period timing in real estate. In order for a buyer to just make the deadline, they would have to go into contract on a home 30-45 days prior to November 30th in order to get their loan underwritten, appraisal completed, and undergo the requisite number of cheetah flips and hoops to jump through as required by lenders these days.  So in reality, this tax credit expires for most buyers  in 15-30 days.

The tax credit has had a very strong impact in The Woodlands and Montgomery county according to many agents and builder sales reps.  Many entry-level and mid-range local builders, they attribute a significant upturn in their sales over the past few months to this $8,000 carriage that is about to turn into a pumpkin.

Talk of this extension is a double-edged sword.  By discussing the possibility of an extension, the main element that makes this credit successful – the sense of urgency – is diluted.  On the other hand, we know that if the credit is not extended before it expires, it will probably not be resumed and extended afterwards.

The tax-payer in me has mixed feelings about the tax credit.  Most people will not have to pay it back – they only have use the purchased home as a primary residence for 3 years and they have no repayment obligations.  Essentially a program like this is like the “cash for clunkers” program – it borrows buyers from the future.  Buyers who were very early in the buying cycle have accelerated their buying decision because of this artificial sense of urgency. I doubt that it has “created” buyers who would otherwise not have bought in the next 2-3 years.

Then again, we are spoiled here in the Woodlands  real estate market. I was at a national real estate conference just a couple months ago and two Las Vegas agents claimed that 80% of the homes for sale in their market were advertised as short sales and 13% were bank-owned for sale… that only left 7% for sale by normal people under normal circumstances.  The impact on all homewoners in Vegas is hard to even fathom and I imagine they’ll take any help they can get.