New Home for the Holidays?

As the Holidays fast approach us the furthest thing from most people’s minds is buying a new home. With Thanksgiving just days away our thoughts turn to family & friends. However you might want to think about this. I have been asked a lot lately about home prices and where the market is at and what do I suggest.
My thinking is that we have bottomed out on pricing in the Lakeland Area and that after the 1st of the year we could easily see an increase in prices. With this thought in mind coupled with the extension of not only the 1st time home buyers tax credit ($8000) but the addition of another tax credit for people who are not 1st timers ($6500) is there really a reason to wait? If you made an offer on a property before year end and closed shortly thereafter you could take the tax advantage easily on your 2009 Tax Return. If you are remotely considering a new home you might want to give it some serious thought.

Home Buyer Fedreal Tax Credit

*The extension and expansion of the homebuyer tax credit is the pending business in the Senate. After a long week of negotiation on the credit, an agreement on the scope of both expansion and extension has been reached. The extension is part of a larger bill that has not yet gone to a vote, however. A Senate vote on the underlying bill will occur in the Senate during the week of November 1. The package will then go back to the House. The House is expected to accept the Senate amendments, vote on the package and send it to the President for signature. The underlying bill is an extension of unemployment benefits. Other provisions in the bill include expansion of the net operating loss carryback rules, new requirements for some tax return preparers and noncontroversial provisions that "pay for" these changes. The agreement on the extension and expansion of the credit is as follows:
Credit available for purchases before May 1, 2010. Prospective purchasers with binding contracts in place as of April 30, 2010 will be allowed an additional 60 days to complete the transaction.
Credit remains at $8000 for first-time purchasers. No change to definition of first-time purchaser.
New $6500 tax credit for repeat buyers who purchase between December 1, 2009 and May 1, 2010. Repeat buyers must have lived in their homes consecutively for 5 of the previous 8 years.
Income limits are expanded to $125,000 on a single return and $225,000 on a joint return. Current law $20,000 phase-out retained.
New anti-fraud limitations are imposed.
The White House has indicated that President Obama will sign the legislation.
*Source NAR Washington Report

As you can see the legislation still feels that a Tax Credit will be beneficial to the ultimate recovery of the Real Estate Market. The fact that it has now opened up the qualification to other than 1st timers will most likely generate additional sales. Income limits are generous and who couldn't use $6500 ??