RISMEDIA, March 5, 2009-(MCT)-Minette and Efren Gomez spent much of last year looking for a house to buy and finally settled on a new townhome at Brookfield Homes’ Cordova at Windingwalk in eastern Chula Vista.
The couple, with two children and a third expected in April, were due to close escrow Friday. But they delayed until today because they qualified for a $10,000 state new-home tax credit that took effect Sunday.
They also qualified for an $8,000 federal credit for first-time buyers.
“We have the perfect timing, purchasing at the right time,” said Minette, 29. The couple are also taking advantage of a 5% mortgage interest rate, a no-down-payment Veterans’ Administration loan and $24,000 in builder incentives, enough to pay off a car loan and cover starter home costs.
The temporary tax benefits were credited by some local builders as boosting visits to their sales offices over the weekend. Both the federal and state governments hope the credits will spur sales, reduce inventories, stabilize prices and prompt new construction to help the beleaguered housing industry.
“I sense we’re seeing people who have waited on the sidelines for a year and they’re anxious to get on with their lives, anxious to make this decision (to buy) and feel good about it,” Standard Pacific Homes spokeswoman Suzie Ek said, “and sometimes it takes one more real positive piece of information to say this is as good as it gets.”
The two tax credits, coming last month in the federal economic stimulus package and state budget, caused some confusion among buyers and sales agents, who were trying to sort out the differences.
For instance, Brookfield spokeswoman Lora Heramb said, the federal credits go to first-time buyers or people who have not owned for at least three years — as was the case with the Gomezes, who previously owned in Hawaii. The credits are only good for homes that close escrow by Nov. 30.
The state credits are available through next March 1, but only to buyers of newly built houses and condos. They are credited in three equal annual amounts on buyers’ state income tax returns but, unlike the federal credits, only to the extent taxes are owed.
The $100 million set aside for state credits is projected to cover about 10,000 homes on a first-come, first-served basis, based on when homes close escrow. “There will be more than that sold in California in the next 12 months,” said Ure Kretowicz, CEO of Cornerstone Communities, who reported slightly better traffic over the weekend at his seven local projects. “So there’s a bit of urgency if they want to take advantage of the credits.”
Borre Winckel, chief executive of the San Diego Building Industry Association, said that with the stock market experiencing a big down day yesterday, potential buyers might have seen any housing tax credits wiped out in one session. “Of course, just like we want there to be a bottom in the housing market, we want a bottom in the stock market,” Winckel said.
On the resale side, Rex Downing, a real estate agent in Kensington, said his first-time buyers are already intent on finding homes this year, regardless of tax
“As people come through open houses,” he added, “I ask them about the credits and they’re only vaguely, generally aware of it.”
One of his clients, John Ryan, 36, said that he and his wife, Jocelyn, 35, began shopping for their first home in the $300,000 price range two weeks ago with Downing’s help — motivated by dropping prices.
“It was like icing on the cake,” he said of the credits. “We’re certainly not going to buy a house solely because of an $8,000 tax credit. So if it’s all very nice and comes together, that’s awesome. But I think, primarily, our goal is to get a place we like.”
Copyright © 2009, The San Diego Union-Tribune
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