First time home and repeat buyers as well are racing to meet the April 30th deadline for tax credits. There is no better time to be a home buyer in the Raleigh area than now, with the combination of decreased home values, low interest rates, and tax credits of $8,000 for first timers and $6,500 for repeat buyers. The tax incentive is slowing the decline in home sales. Now more than ever, it is easier for first time home buyers as well as repeat buyers to purchase the home of their dreams.
According to Zillow, the online real estate service, median listing values in Raleigh are $204,900, down 5% since last year at this time last year, while the median sales price is $190,600. In Cary, there is a 6% decrease since last year, while in Wake Forest, the decrease is 10.1%. Though there was a slight decrease in snowy February, home sales have generally outpaced sales from the previous year in past months.
Economist Kevin Gillen, of Econsult, attributed to over 350,000 sales in 2009 to first time home buyers throughout the country. The National Association of Realtors® expects that March and Aprils statistics will show that the credit has improved sales figures during the extension period as well.
Determining if you qualify for a first time home buyer credit is simple. If you have not owned a primary residence in the last three years, you would qualify. However, if you file taxes jointly with your spouse, neither of you could have owned a primary residence in the past three years to meet the requirements of this tax credit.
For the repeat buyer’s credit, you must have occupied a home you owned for five consecutive years of the last eight. You do not have to sell your old home, not so you have to be living in it now, so this credit offers a lot of flexibility for repeat buyers.
It is important for first time home and repeat buyers to understand that the tax credit is very different than a tax deduction. This tax credit will essentially be like putting money in your hands, whereas a tax deduction will reduce your taxable income. If a Raleigh home buyer were to owe $8000 in income taxes and qualify for the max first time buyers credit, they would then essentially owe nothing. The same principle applies to repeat buyer credits.
Without the pressure of having to sell a home, first timers are ready to buy. This ready market allows owners who want to make a change to put their homes on the market with confidence. Do not let this rare opportunity pass you by put your dream home under contract by April 30th.