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November 2009
Index of all
messages
from the Association President
Make your “Call for Action” count
Understanding the tax credit and its impact on your business
By David Barber, AAR President
As we near the sunset on the $8,000 tax credit for first time buyers, NAR has issued a “Call for Action,” requesting support from your Political Survival Fund (PSF) contributions to help the United States Congress extend this benefit to the taxpayer, and to our business as REALTORS®.
We have a choice whether we answer NAR’s call or not? Should we respond to the “Call for Action”? Well, let’s examine the impact on our business in the months since the program has been enacted.
The first program Congress put into place was the $7,500 credit for first time buyers; the impact was minimal, primarily because the program contained a repayment feature which most buyers saw as nothing more than additional debt on their home purchase. Early this past spring, a new program was introduced which offered a credit of 10 percent of the purchase price up to a maximum of $8,000 and eliminated the re-payment feature of the first program.
Response to the new program has inspired many “fence sitting” first time buyers to make the move into home ownership. NAR suggests that 355,000–400,000 transactions have been a direct result of the program*. When coupled with their estimate that every home purchase pumps approximately $63,000 into the economy*, you can see that the impact has been significant.
Further, NAR data suggest that national inventory levels have dropped from a 9.1 month supply to 8.2 months* since the program was implemented. In our own market, we have seen residential listing prices in AUN rise from $128,011 in March to $142,610 in September and inventory levels hover in the two- to three-month supply range**.
Listing prices in AUS have risen from an average of $241,661 in March to $246,813 in September, while inventory levels have dropped from a 3.06 month supply in March to 2.74 in September**. Even condo sales have improved with absorption rates dropping from 4.18 months for March to 2.8 for September in AUS**.
The benefits of the tax credit to our industry have been significant and measurable, and your response to NAR’s “Call for Action” is key to the extension and perhaps the expansion of the program. Members of Congress are debating what to do next and are considering allowing the credit to benefit all owner occupants, not just first time buyers. Let them hear our voice!
*NAR Report: Homebuyer Tax Credit best tool for sustaining housing recovery.
**Metrolist data. |
