Federal and California tax credits were created to lure home buyers into the market. Simi Valley home buyers have a small window of opportunity to take advantage of both tax credits and double-dip the system. The federal first-time home buyer tax credit of $8000 is set to expire April 30. More specifically, home buyers qualify for this program will need to have a house under contract by April 30, 2010. They will need to have escrow close prior to June 30, 2010. At the same time, starting May 1, 2010 any escrows closing prior to June 30 will qualify for the California first-time home buyer tax credit of $10,000. While this credit is good through December 31st, 2010. The opportunity to double dip the system needs take place before June 30.
My main concern with these home buyer tax credit programs is that Simi Valley home buyers (especially low down payment buyers) will rush to purchase a house and end up chasing a tax credit cash for a clunker. Many of the properties for sale in Simi Valley currently are short sales and foreclosures. These properties typically have significant amounts of deferred maintenance and repair issues. Many times the repairs needed to restore these properties will far exceed any monies gained in tax credits. Keep in mind, at the California tax credit is spread out over three years and not given all at once.
My second concern is that these tax credits are really not creating any additional interest in the market. In fact Simi Valley home sales volume and average home prices have dropped every month since December 2009. I believe that the attractive affordability and low interest rates are driving the market currently and that sales would not suffer much if at all if the tax credits were to go away.
Those Simi Valley home buyers concerned that they may be missing a market can step back, relax and breathe a sigh of relief as the market is certainly near or at the bottom and will be for a long time before the market breaks through and start pushing out to a real recovery.
If you are a Simi Valley home buyer there is limited time to be able take advantage of the double-dip but don’t get caught up in a frenzy and end up with a property that will cost far more to fix up and what you will gain tax credit.
If you are a Simi Valley home seller, if your home is been on the market for a while and has not received any offers, now is the time to review your pricing strategies compared to other homes on the market that compete with your home and the homes that have sold in the last 120 days that compete with your home and adjust your pricing to bring a buyer before April 30.
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Author – Ted Mackel Simi Valley Real Estate Agent – Keller Williams Realty
Ted Mackel is a top producer at Keller Williams Realty Simi Valley,
specializing in Simi Valley Real Estate
(805) 432-7705
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