Tax credit extension can help home buyers

Potential home buyers who thought they had missed out on an $8,000 first-time homebuyer tax credit have another chance.

President Obama signed an act extending the credit past the November 30 deadline and offering a new $6,500 "move-up" tax incentive for current homeowners.

Impressions of the effects of the tax credits in the Sisters Country market are mixed, but there is wide agreement that the incentives could benefit some local buyers - and add impetus to a market that is showing its first signs of life since the summer of 2008.

"We already have record low prices, and it just adds one more incentive to save money," said Ross Kennedy, a Realtor with RE/MAX Town & Country Realty in Sisters.

Kennedy noted that foreclosures and short sales, while a sign of a troubled market, also provide opportunities for families who can now consider getting into a home.

"Somebody who is doing a first-time buy is getting a phenomenal deal," he said. "You're buying a foreclosure or a short sale and you're getting an $8,000 tax credit. It's a great deal."

"That's a huge benefit," said Darcy Fritzke of Met Life Home Loans. "But first and foremost, they have to like the house. I've worked with a few people who just haven't found the right house and they were going to forego the tax credit rather than 'settling.' But it got extended, so that's good."

"First-time" buyer is defined as someone who has not owned a home for the last three years. To qualify for the credit, a contract must be in place by April 30 and the purchase must be completed by June 30.

To qualify for the "move-up" credit, a home buyer must have owned and resided in his or her current home for five of the past eight years. The same deadlines apply, and income levels for both credits are set at $125,000 for individuals and $225,000 for couples.

Kevin Dyer, of Ponderosa Properties, doesn't see much impact from the tax credits.

"I think it has less impact in the Sisters market than in other places," he said.

That's partly because the pool is small and many homes, like those in Black Butte Ranch, are second homes. And the local job market is too small to attract many families in the first-time buyer category.

However, Dyer said, the credits do mean something to a buyer if circumstances are right.

"It's a tremendous opportunity for them if they can get financing, etc.," he said.

"People who have always wanted to buy in Sisters can maybe do it now," Kathy Kemper-Green, of Arbor Mortgage, said. "Right now, for a lot of people this is the perfect environment, even though for a lot of people it's not."

Mike Mansker, of Coldwell Banker Reed Bros. Realty, sees only minor impact in Sisters - for one prominent reason.

"Most people buying in Sisters aren't buying their first home," he said.

He sees the "move-up" credit as a "bonus" rather than a dealmaker.

"I don't think it'll be a compelling force," he said.

Even if the tax credit only provides a limited jolt to the market, it's welcome.

"It's just one more conduit to hopefully get our economy a little healthier," Kemper-Green said.

Sisters, she said, needs to soak up a lot of inventory and get foreclosures and short sales off the market.

"That's what you're competing against in appraisals," she said.

Dyer and Mansker, who have both had years in the Sisters market, say that there are some glimmers of light in what has been a long, dark tunnel.

The Sisters market has seen "a couple of strong months" in September and October," Dyer said, "which is promising and a relief. We've got prices that are exciting people again, which is good."

There are currently 13 sales pending in the Sisters Country, Dyer said, and there is reason for some cautious optimism about the beginnings of a recovery in the market.

Mansker has a similar take. He said that the last half of 2008 and the first half of 2009 "were the darkest hours," and the market is seeing an uptick. However, he notes that many people expect a quicker recovery of prices than the market will bear out.

"Seeing prices recover is not an overnight thing," he said. "Real estate doesn't bounce like the stock market does."