Bend Oregon Real Estate Activity

Over the last few months, the Bend Oregon real estate market has shown some pretty dramatic activity . . . much of it at the low end of the price spectrum (of the 174 homes that sold in October, almost half were below $200,000).  A major reason for this low end activity was the $8000 tax credit offered to first time buyers if they closed their transactions by Nov. 30, 2009.

Tax Credit Extension

Last Friday, the market in Bend Oregon, and elsewhere, got another boost as President Obama signed a bill that will extend and expand the tax credit until the middle of next year.  The bill was signed after Obama received a “sobering” report from the Labor Department with new unemployment figures showing rates topping 10%–the highest rate in 26 years.

Break for buying a home in Bend Oregon

The legislation  will extend the $8,000 homebuyer tax credit to contracts signed by April 30 and closed by June 30. The controversial credit, which many say has boosted home sales in recent months, was set to expire after Nov. 30.

The bill will also expand the credit, though with some rather esoteric guidelines– offering a  $6,500 credit to those who buy a home after living in their current house at least five years.  The credit will be available only for the purchase of principal residences priced at $800,000 or less (darn!).

The flip side of things is that the extension will cost $10.8 billion over 10 years, according to the Joint Committee on Taxation.

Through mid-September, 1.4 million tax returns had qualified for the credit, according to the IRS. Some portion of those returns, which the IRS couldn’t specify, represents buyers who took advantage of an earlier version of the tax credit, which was only worth $7,500 and has to be repaid over time.

By the end of November, the credit will have been used by 1.8 million homebuyers, at least 355,000 of whom would not have bought a house without the tax break, according to estimates by the National Association of Realtors.

“The data on the present home buyer tax credit show that the credit has had its intended impact — sales have jumped in recent months to a projected 5.1 million for the year and housing inventory has been trimmed, thus stabilizing home prices noticeably,” said Ron Phipps, the association’s first vice president, in Senate testimony last month.

Fraud?

The credit, however, has also posed many problems. Critics say it’s a waste of money because most of those claiming the credit would have bought homes anyway.

It’s also been the target of fraud. Some 74,000 people claimed more than $500 million in credits even though they may not be first-time homeowners, according to Treasury officials. And more than 580 children, including some as young as 4-years-old, have claimed the credit.

Much of this information is from CNNMoney.com.  To search for homes you may be able to purchase using this tax credit, click here. For more information on the vagaries of the tax credit itself, please don’t click here.