Lansing State Journal
Sheri Tulloch put her Lansing home on the market in March 2008, only for it to become a "huge source of frustration" when the 950-square-foot ranch just wouldn't sell.
But after about a year and a half, and out of desperation, she changed real estate agents and eventually sold it in September.
Turns out her timing couldn't have been better. The 36-year-old choir teacher, who is about to close on a home in Grand Ledge, is eligible for a $6,500 tax credit.
"It kind of goes along with that adage 'good things happen to those who wait,' " Tulloch said. "Everything seems to be falling into place."
For those in the market for a home, the world is their oyster. Interest rates are at record lows. Housing prices in many parts of the country still are depressed. And buyers may be eligible for a generous tax break, even if the home they buy isn't their first.
On Nov. 6, President Barack Obama signed legislation that provides a $6,500 tax credit for some current homeowners who buy another home. The law also extends the $8,000 tax credit for first-time homebuyers, scheduled to expire Nov. 30, until next spring.
Local real estate agents and housing market experts say the law will help stabilize a dysfunctional Michigan housing market, giving a larger set of potential buyers the incentive to take a leap they might not take otherwise, buy a new home, or begin the project of kitchen remodeling Saugatuck.
But after about a year and a half, and out of desperation, she changed real estate agents and eventually sold it in September.
Turns out her timing couldn't have been better. The 36-year-old choir teacher, who is about to close on a home in Grand Ledge, is eligible for a $6,500 tax credit.
"It kind of goes along with that adage 'good things happen to those who wait,' " Tulloch said. "Everything seems to be falling into place."
For those in the market for a home, the world is their oyster. Interest rates are at record lows. Housing prices in many parts of the country still are depressed. And buyers may be eligible for a generous tax break, even if the home they buy isn't their first.
On Nov. 6, President Barack Obama signed legislation that provides a $6,500 tax credit for some current homeowners who buy another home. The law also extends the $8,000 tax credit for first-time homebuyers, scheduled to expire Nov. 30, until next spring.
Local real estate agents and housing market experts say the law will help stabilize a dysfunctional Michigan housing market, giving a larger set of potential buyers the incentive to take a leap they might not take otherwise, buy a new home, or begin the project of kitchen remodeling Saugatuck.
"(It's) going to push people off that proverbial fence," said Bob Filka, CEO of the Michigan Association of Home Builders.
"It's a one-time opportunity until April 30, and I think when you put real money on the table, as we've seen with the Cash for Clunkers program and everything else, we know that people have responded."
April deadline
But once again, the clock is ticking.
To qualify, buyers have to sign a purchase agreement by April 30, 2010, and close by June 30.
Bob Hubbell, CEO of Delta Township-based Coldwell Banker Hubbell Briarwood Real Estate Co., said he expects the incentive to be a "great boost in sales," and not only from first-time buyers.
He's optimistic that existing homeowners looking to either downsize or buy a larger home will see the credit as their reason to do so.
"It's an incentive," Hubbell said. "It's a stimulus for house sales."
For first-time homebuyers, the federal tax credit will continue to cover 10 percent of the home price, up to $8,000.
The National Association of Realtors is forecasting that there will be approximately 2.4 million first-time homebuyers nationwide in 2009. And based on a survey conducted in August, the Washington, D.C.-based trade association estimates that about 400,000 people nationwide will have purchased a first home by the end of November strictly because the tax credit was available.
Association spokesman Walter Molony said it's estimated that some 80,000 people in Michigan will have used the tax credit for a first-time home purchase by the end of 2009.
That's saved more than one Realtor, Filka said.
Good marketing tool
"If you ask any Realtor, they see this as the ultimate tool to market homes in a down economy," he said. "It's vital to them. Arguably, it's kept many Realtors in business that otherwise might not have been able to stay in business this past year."
Hubbell said that in October and November, first-time homebuyers accounted for roughly half of his business. He expects the majority, if not all, of those buyers to take advantage of the tax credit when they file their tax returns.
Tomie Raines Inc. in East Lansing also had about half its business over at least the past two months come from first-time buyers, co-owner Lane Barnett said.
And there are still more potential first-time buyers out there, he said.
"I think there are still many, many, many people on the sidelines that haven't realized yet that with the current market conditions, they can own a home for less than their monthly rent payments," Barnett said.
Year-to-date average home sale prices through October were down 15.2 percent compared to 2008, according to data from the Greater Lansing Association of Realtors, which covers Ingham, Eaton and Clinton counties and some surrounding areas.
Filka said he thinks the extended and expanded tax credit will help stem the decline and possibly even improve sale prices.
"Home values are close to or at bottom in mid-Michigan right now," he said, and thanks to the "age-old law of supply and demand," the credit should allow Realtors to burn off a surplus of unsold homes. With fewer homes on the market, "you're going to see a jump in value or at least a stabilization of home value," Filka said.
Experts also expect the tax credit to have an economic ripple effect as homebuyers make additional investments, such as adding new roofs or kitchens. Those who choose to build new homes also help the construction industry, Filka said.
"If you ask any Realtor, they see this as the ultimate tool to market homes in a down economy," he said. "It's vital to them. Arguably, it's kept many Realtors in business that otherwise might not have been able to stay in business this past year."
Hubbell said that in October and November, first-time homebuyers accounted for roughly half of his business. He expects the majority, if not all, of those buyers to take advantage of the tax credit when they file their tax returns.
Tomie Raines Inc. in East Lansing also had about half its business over at least the past two months come from first-time buyers, co-owner Lane Barnett said.
And there are still more potential first-time buyers out there, he said.
"I think there are still many, many, many people on the sidelines that haven't realized yet that with the current market conditions, they can own a home for less than their monthly rent payments," Barnett said.
Year-to-date average home sale prices through October were down 15.2 percent compared to 2008, according to data from the Greater Lansing Association of Realtors, which covers Ingham, Eaton and Clinton counties and some surrounding areas.
Filka said he thinks the extended and expanded tax credit will help stem the decline and possibly even improve sale prices.
"Home values are close to or at bottom in mid-Michigan right now," he said, and thanks to the "age-old law of supply and demand," the credit should allow Realtors to burn off a surplus of unsold homes. With fewer homes on the market, "you're going to see a jump in value or at least a stabilization of home value," Filka said.
Experts also expect the tax credit to have an economic ripple effect as homebuyers make additional investments, such as adding new roofs or kitchens. Those who choose to build new homes also help the construction industry, Filka said.
Planning to buy
Lansing resident Jason Gabriel plans on having to do a good deal of renovation to a house he and his wife are hoping to buy as soon as possible.
"We would have to redo the external siding; we would have to redo some structural things in the garage, and we would have redo the deck," Gabriel said. "And that's before the inspectors tell us anything else we have to do. Those are the aesthetic choices."
The couple is looking to move from a rented townhouse on the city's south side and into a house in west Lansing. They plan on taking advantage of the first-time homebuyer credit. So far Gabriel said they've made offers on three homes and are waiting for responses.
"We're trying to take advantage of the tax credits that are presented," he said. "I'm trying to get my family into the best home that I can."
Lansing resident Jason Gabriel plans on having to do a good deal of renovation to a house he and his wife are hoping to buy as soon as possible.
"We would have to redo the external siding; we would have to redo some structural things in the garage, and we would have redo the deck," Gabriel said. "And that's before the inspectors tell us anything else we have to do. Those are the aesthetic choices."
The couple is looking to move from a rented townhouse on the city's south side and into a house in west Lansing. They plan on taking advantage of the first-time homebuyer credit. So far Gabriel said they've made offers on three homes and are waiting for responses.
"We're trying to take advantage of the tax credits that are presented," he said. "I'm trying to get my family into the best home that I can."
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