Has the $6,500 Tax Credit Impacted the Move-Up Buyer Market? #AREFchat

April 30th, the deadline for the home buyer tax credits, is only two months away. First time home buyers are scrambling to get their contracts written within the next eight weeks to ensure they get the $8,000, but what about the move-up buyers and the $6,500 tax credit? Since we haven’t heard too much about whether or not the $6,500 tax credit has had any impact on the real estate industry, we decided to make it our discussion topic for today’s #AREFchat.

Unfortunately, the feedback was not very positive. The $6,500 tax credit targeted at move-up buyers has done nothing to boost this particular market. When asked if any real estate agents have worked with move-up buyers trying to take advantage of the tax credit, 100% of participants responded with a no. Kevin B. Morrow (@KBMRG) said “The only move-up buyers I have worked with would have bought now anyway – relocation.”

The reason why the $6,500 credit has been ineffective is plain and simple. No home shopper is going to purchase a new home until their existing home sells. In the current market, how can someone be expected to sell their home and purchase a new home in less than six months time?

Sarah Walraven (@SarahEWalraven) made another great point as to why the $6,500 has fallen short. If a homeowner is able to sell their home now, they are probably lowering the price more than $6,500, making the tax credit obsolete. So, instead of losing money by selling in a buyer’s market, homeowners are happy to wait until the market turns, when they can get a good return on their investment.

Unfortunately, this still means that our move-up buyer market is struggling and until buyer confidence raises, it doesn’t seem like conditions are going to improve.

As for the first-time home buyer tax credit, no one thinks it will be extended a second time. Meaning, it’s now or never take advantage of the $8,000. The big question is whether or not the market will plummet once the credit expires. Most #AREFchat participants think builders are going to have to come up with some great incentives to keep people shopping for new homes. What do you think? What is the future of our industry once the tax credits are gone?

Join us for discussions like this one every Wednesday at 10:00 a.m. EST on Twitter with the hashtag #AREFchat. If you have a topic you want to discuss, let us know what it is.