In Washington and beyond, the discussion is stirring as to whether to extend the First Time Home Buyer Tax Credit of $8,000 which is set to end November 30, 2009. I believe extending this credit will benefit homeowners across the board including owners of Palos Verdes Real Estate.
At first glance, it may not look beneficial to owners of Palos Verdes real estate because the applicant’s income cannot exceed $75,000 (or $150,000 for married couples) and property values here begin in the $700,000s. However, there is the trickle up theory. A Palos Verdes home may be sold to a family (Family A) moving from another community with lower prices. And in order for Family A to purchase in Palos Verdes, they must first sell their home. Family B that is buying the Family A home may be a first time buyer who will be assisted with that purchase ultimately benefiting a seller of Palos Verdes real estate.
“Through July, the tax credit spurred about 175,000 home sales according to an analysis by Mark Zandi, chief economist at Moody’s Economy.com. That trend would lead to nearly 375,000 such sales through Nov. 30, he said.” according to a September 25, 2009, Los Angeles Times article.
