Tampa Real Estate-Will tax credit extension help our market?

There is a lot of talk about extending the first time home buyer tax credit. Some are pushing to implement a credit for anyone that buys a home. There are income limitations in both plans.

The question that continues to come up is "does the credit actually help the housing market." To some extent, yes.

Reports say that 1.4 million buyers took advantage of the tax break so far. NAR (National Association of Realtors) estimates that the extension will create 350,000 additional sales over the next year. I believe if you open the savings up to all buyers, we will see an increase in sales. But the credit is not the "fix" that will save the real estate market and buyers will be selective with their purchase.

Our buyers are not as concerned about getting a tax break as they are about falling values. Recent reports in the media continue to point to more foreclosures and continued decrease in value.

A Moodys economist predicted a price drop in 342 of 381 markets during the next year. According to Fiserv, a financial information and analysis firm the national median home price is predicted to drop by 11.3%, by June of 2010 and the fall in Florida is expected to be even worse.

The report says Hillsborough and Pinellas county real estate prices will decline by 19.2% and values in Polk County are expected to drop by 20.3% through the end of next June.

With news like this, most buyers will continue to sit back and wait for the bottom to hit.

Buyers want deals, not a tax credit. They'll take both though. Just don't expect a huge turn in our market until the short sales and foreclosures are gone. They represent 27% of all homes available but 37% of all closed transactions. 64% of all pending sales are either a short sale or foreclosure