In Santa Fe we’ve seen the $8,000.00 tax credit work affectively and help to stabilize the number of sales in the $100,000.00-$300,000.00 price range in the city. We’re annualizing that approximately 400 sales will occur in this price range in 2009. This means the city would have three consecutive years of approximately 400 sales in the city from $100,000.00-$300,000.00. The tax credit has helped maintain this positive momentum and extending it would help to ensure we move toward a faster recovery.
By JESSICA HOLZER
WASHINGTON — Three major U.S. trade groups are urging the Obama administration to back an extension of the $8,000 first-time home-buyer tax credit set to expire Nov. 30.
“Our fragile economy is just beginning to show signs of recovery. We should not jeopardize that recovery by letting the tax credit expire,” the Mortgage Bankers Association, the National Association of Home Builders and the National Association of Realtors wrote in a letter Monday to senior administration officials.
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* Home Builders’ Confidence Slips
The letter was sent to Treasury Secretary Timothy Geithner, National Economic Council Chairman Lawrence Summers and Department of Housing and Urban Development Secretary Shaun Donovan.
Lawmakers from both parties, including Senate Majority Leader Harry Reid (D., Nev.), are pushing for an extension of the tax credit. House and Senate panels will hold hearings addressing the tax credit this week. The White House, however, so far has been silent on whether it supports an extension.
The large price tag for prolonging the tax credit is likely to put off many would-be supporters, including many on Capitol Hill concerned about the widening budget gap. The cost of a Senate measure to extend the tax credit through June 30, 2010, and broaden it to cover all buyers of a principal residence, not just first-timers, would cost $16.7 billion, congressional analysts said.
Critics of extending the tax credit say it is an inefficient way of boosting the economy because it helps many people who would have bought a home anyway. There are also concerns that extending the tax credit could exacerbate surging vacancy rates for rental housing.
The realtors group estimates the tax credit — enacted last year and revamped early this year as part of the economic stimulus package — has generated about 355,000 home sales that wouldn’t have otherwise occurred.
