The National Association of Realtors is Lobbying in Congress!
|(This letter went out in the thousands by Realtors throughout the country. NAR is the largest trade organization in the US... So stand by maybe this will help!)
You did a good thing in 2008 when you enacted the $7500 first-time homebuyer tax credit. Unfortunately, the tax credit is not generating the stimulus that either Realtors or legislators had expected. In our area, we are finding that prospective homebuyers simply see no incentive effect in a tax benefit that will have to be paid back over time. At a time when people are trying to minimize their debt loads, the tax credit is perceived as simply adding to their debt, not as providing a benefit.
A further challenge with the repayment feature is that there is literally no one who can explain the mechanics of how the credit will be paid back. No other tax credit available to individuals must be paid back. Thus, there is no precedent that would suggest a model for how taxpayers would make the payment. As the repayments will not commence until 2010, the IRS has not yet provided guidance. Thus, Realtors can provide no explanation to prospective purchasers who are reluctant to undertake a tax obligation they don't understand.
The NATIONAL ASSOCIATION OF REALTORS (NAR) believes that the credit would provide a more beneficial stimulus if the repayment requirement were eliminated. In addition, the credit should be available for all purchases of a principal residence and not restricted solely to first-time homebuyers. It should also be extended through December 31, 2009.
NAR's recently-released Pending Home Sales Index report for November 2008 showed the greatest decline in pending sales transactions since NAR began tracking this market segment in 2001. (The Pending Home Sales Index is based on pending sales of existing homes. A sale is listed as pending when the contract has been signed but the transaction has not closed at settlement.) This suggests that the marketplace has not yet responded to this tax incentive. This data underscores the pressures in the housing market. Presently, the inventory of available houses available for purchase is more than three times its usual level.
I urge you to include a provision in the upcoming stimulus package to eliminate the repayment feature of the tax credit, to extend the credit to all purchasers of a principal residence and to make the credit available through December 31, 2009.
Cynthia C. Carnahan, CRS,GRI
The Carnahan Group, Inc.
J.P. Weigand & Sons, Inc.
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