Talk about extending the $8000 first time home buyer tax credit is heating up.  With the December 1st deadline, quickly approaching,  there is legislation in both the Senate and the House that would expand the tax credit.

A proposal by Sen. Johnny Isakson, R-Ga., would raise the credit amount to a maximum of $15,000 for any buyer, of any home, over the next year. Additionally, it would remove the income caps of $75,000 for individuals and $150,000 for couples, that currently apply.

“I think we’ve got a realistic chance of doing this,” Isakson says.

The proposed changes would certainly impact the markets in a much bigger way.  First removing the “First Time Buyer” provision would open the credit to millions more consumers.  The current credit has been great for liquidating large amounts of low end, foreclosure type inventory, but has done very little for the bread and butter of the market.

In the Denver area, the ability for current homeowners to take advantage of this credit would cause the market to start turning over.  In a typical market, a $250,000 seller will buy a $400,000 home, the $400,000 seller then buys a $600,000 home, etc.  Currently, this is not taking place.  The majority of sellers are banks and investors selling to first time buyers, with no subsequent move up purchase.

“Our problem is not with the first-time home buyer, it’s the move-up buyer.” Lawrence Yun, chief economist at NAR, says extending or raising the tax credit would spur the housing recovery, which in turn would help bolster the economy.

There is a huge upside for those current homeowners that have been considering a move, but have been unable to sell their current home.  The dilemma this legislation poses is for the first time buyer.

As a first timer, is it worth the risk of this legislation failing to pass?  I’m a proponent of the old “bird in the hand” philosophy.  Currently, we KNOW those closing before December 1st get the $8,000.  After that, nothing is for sure!

Is it worth the gamble?  Leave a comment and let us know what you think.  If you want to discuss privately, feel free to contact anyone here at the Get Home Denver Team.

Photo Credit: by John Wardell (Netinho)

Bob has been an active REALTOR for 18 years. During this time, he has closed over 500 transactions, and has been the broker of record for 1000's more. Bob can be reached via email (bob@gethomedenver.com) or phone (303.770.1180.)