Christine Dykhouse is planning to sell her Dennis Township home and take advantage of a federal tax credit. She was thrilled when her real estate agent said she would qualify for a $6,500 credit, even though she plans to trade down. The deadline for these tax credits is April 30, which local agents say is causing a little movement in the market, and they expect it to grow. Photo by: Ben Fogletto
By MARTIN DeANGELIS Press of A.C.Staff Writer | Sunday, March 21, 2010
The Ocean County Board of Realtors’ Web site prominently shows off a clock counting down the days and hours — and even minutes and seconds — until a federal tax credit for many homebuyers expires April 30.
There’s still hope in parts of the real estate market that the credit will be extended past that date — as it was last November, when Congress actually expanded the credit to a whole new segment of the market. Instead of just first-time buyers being eligible for an $8,000 benefit, the government added a $6,500 “move-up” credit for current homeowners buying new homes.
In spite of that nickname, the program’s rules specifically say the tax credit isn’t just for people buying more expensive homes. It applies to anyone who has owned and lived in a home for five out of the past eight years and goes out and buys a new primary residence.
So since Christine Dykhouse is hoping to sell her home in Dennis Township, Cape May County, and get a smaller house in Upper Township, she actually hopes to benefit twice from the tax credit. Dykhouse wants to buy a place before the April 30 deadline, so she thinks potential buyers for her current home, in the township’s Oceanview section, may also be trying to move fast enough to get in on the program.
“I’m looking to downsize,” says Dykhouse, a 57-year-old nurse. “My husband passed away, my two boys are now in their 30s, and this is just too much house for me to handle.”
So she was thrilled when her real estate agent, Kathleen Manganello, told her that even a buyer trading down qualifies for $6,500 in tax credits.
“People don’t understand that this is available to them,” says Manganello, of Coldwell Banker Township Realty, in the Marmora section of Upper Township. “We make it a point to tell our clients and put it on our listings, but when I explain it to them, they get excited. They had no idea this was available.”
But Jenna Tabasso, 24, who made settlement on a three-bedroom rancher in Northfield in January, was well aware that she qualified for the $8,000 credit for first-time buyers. She thought of that every time she checked out a house for sale.
“It was absolutely a big factor for me,” says Tabasso, a manager for a nursing agency. “Instead of looking at the house as it was, I’d look at it and imagine what I could do with the $8,000 to make it my own.”
She thought she would be moving out of her parents’ Margate home sooner than she did, because she was trying to buy a house before the first-time buyer credit first expired last November.
“That house ended up falling through,” Tabasso says. “So the extension was the key. I got a house in better condition and still got the credit.”
Her agent, Ginger O’Neill, of Argus Real Estate in Ventnor, says all buyers obviously aren’t as pumped up about the tax credit as this one was.
“I don’t think (the market) is on fire, but I know that enough people are conscious of it that it’s kind of nudged them off the fence,” O’Neill says.
“On one hand you have the tax credit, which is wonderful, a definite boon,” adds Lester Argus, the agency’s president. “But at the same time, you’re still running into the same problem with financing being pretty tough.”
Real estate agents across the country give mixed reviews to the tax credit, saying that in many markets, it’s not nearly enough to overcome a weak economy and unemployment still near 10 percent.
“If you don’t have a job, you’re not going to be able to buy a new house,” as Deborah Farmer of StarLight Realty in Tampa, Fla., put it in an interview with the Associated Press.
Bad winter weather in much of the country has also kept home sales down lately. A National Association of Realtors survey found that pending home sales were down 7.6 percent from December to January, the most recent figures available. Still, January’s pending sales actually increased by
12 percent nationally over the same month in 2009, the NAR says.
The New Jersey Association of Realtors created that tax-credit countdown clock — the one the Ocean County branch is displaying on its Web site — as part of “our way of communicating to the public … that what’s happening on a national basis doesn’t necessarily mean it’s happening in their backyard,” says Jarrod Grasso, the NJAR’s chief executive officer.
Grasso agrees that the snowiest winter in history in parts of New Jersey didn’t exactly heat the market up these past few months.
“We had rough weather, and a lot of people weren’t out house-hunting,” he said. “But now that spring is upon us, there’s more and more activity. Maybe it’s a combination of the good weather and the tax-credit deadline looming out there.”
And although there are people hoping that deadline could get yet another extension before it expires, Grasso isn’t one of them.
“I wouldn’t be thinking along those lines,” he said. “If you’re thinking of buying a home, and you’re financially qualified, now is a tremendous time to take advantage of the tax credit. But you can’t rely on it being extended beyond April 30.”