Futures and Commodity Market News

Sat Nov 21, 2009

Breaking financial news 24/7 courtesy of TradingCharts.com Inc. / TFC Commodity Charts

Nov 07, 2009 (The Island Packet - McClatchy-Tribune Information Services via COMTEX) -- An extended and expanded tax credit for some home buyers should help the area real estate market -- and the entire local economy -- recover from the recession, Beaufort County real estate agents said.

First-time home buyers have been eligible for tax credits of up to $8,000 since January as part of the economic stimulus package. With that program scheduled to expire Dec. 1, Congress voted to extend it into the spring -- and include people who already own homes. President Barack Obama signed the bill Friday.

Buyers who have owned their current homes at least five years would be eligible, subject to income limits, for tax credits of up to $6,500. First-time home buyers -- defined as people who haven't owned homes in the previous three years -- could get up to $8,000. To qualify, buyers have to sign purchase agreements before May 1 and close before July 1.

Wallace Thomas of Century 21 Carolina Realty in Beaufort said he is thrilled even though he had hoped for a larger credit.

"I don't think it will create a frenzy like we would like, but it will help," Thomas said.

The credits could be particularly helpful to young military families buying homes in Beaufort County, Thomas said.

It also could further boost a market that is showing signs of recovery.

Home sales in Beaufort County have increased three of the past four months after seven consecutive months of decline, compared to the same months a year earlier.

The expanded credit could keep a recovery going through the winter, typically a time of slow sales, experts said.

It also could get more buyers for higher-priced homes. Homes under $150,000 have fared well with first-time buyers, but adding existing homeowners might boost sales of homes into the $200,000s.

The addition of existing home owners was welcome news to James Wedgeworth of Charter I Realty & Marketing on Hilton Head Island.

"This is more help than what they had done originally," Wedgeworth said. "I wish there were not limits on it, but I'm not a congressman."

Although the expanded credit could help the $150,000 to $250,000 market, sales of higher-end homes aren't as likely to spike, Coastal Carolina University economist Don Schunk said.

"It's something that can only benefit both low-end and medium-range properties ... in the short-term."

The credit is available for principal homes costing $800,000 or less and is phased out for individuals with annual incomes above $125,000 and for joint filers with incomes above $225,000.

The real estate industry lobbied hard for the expanded tax credit. Lawmakers said the program, expected to cost about $10.8 billion, will not be extended again.

Wedgeworth and Thomas said they believe that cost is worth it if it spurs the entire economy to recover.

"If we don't get the real estate market turned around, everybody loses," Wedgeworth said.

Some experts warn that the government help won't fix the state's bleak economy, which has the nation's fifth-worst jobless rate.

Lending standards and unemployment rates will have to improve to get South Carolina into a long-term recovery, said Brian Boyer, vice president of real estate development for Inspired Communities in Columbia.

"That's just one piece of the puzzle," Boyer said of the tax credits.

Nearly 22,000 home buyers have taken advantage of the tax credit so far in South Carolina, according to the Internal Revenue Service.

Some economists have said that fewer than a third of people claiming the credit nationwide are believed to have bought their homes because of the tax break.

"We need to get to a point where people are buying a home, not because of an $8,000 tax credit," Schunk said, "but because people are comfortable with their jobs, comfortable with their income and they have money saved up for a down payment."

To see more of The Island Packet, or to subscribe to the newspaper, go to
http://www.islandpacket.com. Copyright (c) 2009, The Island Packet, Hilton Head
Island, S.C. Distributed by McClatchy-Tribune Information Services. For
reprints, email tmsreprints@permissionsgroup.com, call 800-374-7985 or
847-635-6550, send a fax to 847-635-6968, or write to The Permissions Group
Inc., 1247 Milwaukee Ave., Suite 303, Glenview, IL 60025, USA.

Josh McCann

Copyright (C) 2009, The Island Packet, Hilton Head Island, S.C.

Please read the End User Agreement.
By accessing this page, you agree to the terms and conditions of the End User Agreement.

News provided by COMTEX