House OK’s extension of home-buyer credit 

Posted: 7:06 pm Thu, November 5, 2009
By Robbie Whelan
Daily Record Business Writer

Robert Hood, a retired grocer, wants to sell his three-bedroom, brick-fronted home in middle-class Hamilton and move with his wife to his family property in Back River for a quiet life by the water.

“If someone comes in today and says, ‘We could buy,’ then we could leave right away,” he said. “The house is paid for.”

On Thursday, making that sale got a little easier, as the House of Representatives pushed forward a bill that extends the $8,000 first-time homebuyers tax credit that has buoyed the housing market since January, and offered a new credit of $6,500 for homebuyers who have lived in their homes for less than five years.

The first-time buyers’ credit, which was originally offered as a national economic stimulus to prop up flagging home sales, was approved by a vote of 403-12, as part of a larger bill that also extended unemployment benefits 14 additional weeks. The bill approved by the House was an unamended version of a bill passed with an overwhelming majority by the Senate on Wednesday. President Barack Obama is expected to sign the bill.

Maryland Democratic Sen. Ben Cardin was an original sponsor of the bill last year, and said Thursday that he had continued to work closely with Sen. Harry Reid, the majority leader from Nevada, and Sen. Johnny Isakson, a Republican from Georgia, to get the credit extended. The bill is meant to help stabilize the housing market by encouraging buyers to purchase the outstanding inventory of homes on the market left by tight credit markets and the foreclosure crisis.

“Our first priority was to get the bill extended,” Cardin said. “Second, I wanted it for the step-up houses. I think it makes great sense. … When you have a large inventory of homes on the market, it makes it very difficult to get housing starts.”

In Maryland, home sales have begun to recover, but by the end of the second quarter, research reports showed that prices in the state were down about 9 percent.

The National Association of Realtors estimates that the first-time homebuyers credit has so far brought 6,200 Maryland buyers into the market. A total of about 28,900 first-time buyers in the state are expected to take advantage of the credit by the time it expires.

“There’s no doubt that the credit’s been a benefit to this market, and nationally,” said Joseph T. “Jody” Landers, executive vice president of the Greater Baltimore Board of Realtors, a trade group. “If you look at the volume of sales in the last year, we just kept pace with prior years. Without the credit, we would have really been in trouble.”

Under the terms of the bill, the $8,000 credit, which was set to expire at the end of November, will be applied to contracts signed by April 30 and closed by June 30, 2009.

Applicants for the $6,500 “step-up” credit, for homebuyers looking to upgrade to bigger houses, would have to buy a home after living in their current house for at last five years. Both programs together are expected to cost $10.8 billion over 10 years.

Phil Engers, who founded Baltimore’s Access Realty Group in March, and is selling the Hoods’ home in Hamilton, said he was pleased at the emphasis the government is putting into attracting young people to the market.

“I have four children between the ages of 24 and 35, so first-time homebuyers are my business” he said, adding that his children often introduce him to clients. “The $8,000 made the difference this year for me and my business.”