Now that the federal first-time homebuyer tax credit has expired, will the sale of homes in New Jersey be significantly impacted? The full effect won’t likely be appreciated for several months – after data can be analyzed – but there is a possibility that a considerable portion of those in the market for a home may return to the sidelines.
The tax credit, which was part of the Worker, Homeownership, and Business Assistance Act of 2009, extended an $8,000 credit to first-time buyers and up to $6,500 to repeat buyers (who owned and resided in a home for at least five years). The credit was offered from January 1, 2009, through April 30, 2010.
It appears that the Obama administration is reticent to again extend the credit, so the impact on the sale of homes in New Jersey remains to be seen.
It is important to note that if a binding sales contract was signed prior to April 30, 2010, a home purchase completed by June 30, 2010, will still qualify for either of the credits.
It is fair to suggest that the credits’ expiration may only impact a specific market of homes in New Jersey. First-time buyers, for example, are likely to seek homes in a certain price range. How the overall market may be influenced by the expiration of the repeat homebuyer credit is more difficult to assess.
In either case, New Jersey properties continue to make their way to the market, despite a historically high unemployment rate.
The Garden State remains a highly desirable location for those considering a home purchase. And the spring buying season will continue for several months as the market attempts to continue its recovery.
How the credit expiration may impact sales, however, remains to be seen.
