IN THE NEWS: How will the $787 billion stimulus package affect you?

“•First-time home buyers. First-time home buyers are eligible for an $8,000 tax credit. And unlike the $7,500 credit enacted last year, this one doesn't have to be repaid, unless you sell your home within three years.
 
The credit is available to taxpayers who buy a primary residence between Jan. 1 and Dec. 1, 2009. The credit phases out for taxpayers whose AGI exceeds $75,000, or $150,000 for married couples.” USA Today

Whether one is for or against the government bailouts and stimulus package, one must wonder just how much the $8000 tax credit to first time homebuyers is really going to stimulate the real estate market.

First of all, isn’t it the first time homebuyer market and the lack of lending standards that started this mess. With interest rates at industry lows for a decade now, everyone who was in the market for a home, should have been able to have one. Even those who did not really qualify by generally accepted industry standards, got one.

Secondly, lenders have come to their senses and tightened the qualifications. Borrowers’ credit scores must be better, they must have money for a down payment and/or closing costs and they must provide proof of employment. Additionally, the largest segment of the population that might be considered new potential first time homebuyers, i.e., recent college graduates and graduate students, are largely unemployed or working part-time gigs while networking to find a position they were educated to perform.

So who will take advantage of this most generous gesture and just how stimulating can it be to our degenerate economy? The AGI limits will also significantly reduce the pool of eligibles. After all, if a first time homebuyer was educated in a field where there is demand and was able to get a job after college, isn’t it likely he’ll be making more than $75,000, or $150,000, if he is married?

After twenty years in the Dallas real estate market as a Realtor® and Broker Associate at a leading real estate company, I have watched the pendulum swing 180 degrees and back again. I think we are fooling ourselves if we think this tax credit, and heaven forbid someone needs to sell in less than three years and then must pay back the $8000, is going to actually rejuvenate our ailing housing market.