The New $6,500 Tax Credit for Move-up Buyers
When I first heard the news about the $6,500 tax credit for move-up buyers I was excited, I was glad to hear that another segment of the market was going to be stimulated. After all, the $8,000 first time home buyer tax credit has stimulated the Albuquerque Real Estate Market, at least in the under $200,000 range.
But then I got to thinking, "Just exactly who is going to qualify for this credit."
Let's look at some potential candidates:
Who's Going to Use the $6,500 Tax Credit to Buy a Move-up Home?
Growing Albuquerque Families Who Want a Larger House
These families will have to sell before they can buy. However, most growing families don't have a lot of equity in their homes or a lot of disposable cash to bring to the closing table, so they won't be able to reduce the price on their current homes to today's values to sell.
Maybe there are a few who put significant money down when they bought, but that is certainly a minority of people.
Maybe they didn't pull money out of their house to pay off their credit card debts, but a lot of people did just that.
They could always rent out their old homes, but around here the rental market is still pretty soft.
Relocating Families
Well, a good number of these people were going to relocate from Albuquerque to who knows where because of their jobs. I'm sure the $6,500 will be nice for them, but many of them would have had to move anyway.
Families Who Want to Downsize
Perhaps the kids have moved out and now it's time for something smaller. But empty-nestors who are approaching retirement have to be really careful with their money because if they're like most Americans, their retirement funds aren't where they hoped they should be. They're not going to be excited to sell for way less than their homes were worth three years ago. Especially considering that it's a seller's market in the artificially stimulated part of the market-lower priced smaller homes.
Investors?
Nope, not in the traditional sense anyway. The new property must be owner occupied.
Will the $6,500 Tax Credit Have a Positive Effect on the Albuquerque Real Estate Market?
Albuquerque Home inventory is still around an eight month supply, which is a sellers market. One thing I am afraid of is that this credit is going to persuade some sellers who have been sitting on the sidelines to list their homes and add to the already robust existing home inventory.
Is this really a good time to flood the market with new listings?
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Albuquerque Realtor Rich Cederberg works for RE/MAX Finest in Albuquerque New Mexico. Previously Rich worked for RE/MAX Elite and the Vaughn Company Realtors for 5 years. He specializes in Albuquerque Real Estate, Northwest Albuquerque Real Estate, Rio Rancho Real Estate and Los Lunas Real Estate. He especially enjoys working with First Time Home Buyers. Call Rich if you need a Albuquerque REMAX agent.
