First-time homebuyers racing to get $8,000 credit
CAPITAL REGION Beth and Brian Hoppe are alternately excited and apprehensive as they wait to close on their first home in Niskayuna this month.
The mortgage debt for the 4-bedroom, 1.5-bath Colonial-style home and the wide array of homeowner headaches that come with it, like downed trees and basement floods, may bring some anxiety for the couple, but they’re happy about taking the plunge into ownership. They believe it’s a good time to buy a home, especially because of a federal incentive.
The Hoppes will join the other 60,000 New Yorkers who have filed for the $8,000 first-time homebuyer tax credit. The Internal Revenue Service estimates that $409 million in first-time homebuyer credits have been collected in New York state, according to Dianne Besunder, IRS spokeswoman for New York. The data was processed through Feb. 20 for homes purchased through the end of 2009. Nationwide, nearly 1.8 million Americans had filed for $12.6 billion in tax credits.
“This is a sizeable tax credit. It would be unfortunate for any potential homebuyer to leave this money on the table simply because they missed the deadline,” Besunder said. “If you’re in the market, build your timeline accordingly to take advantage of this credit.”
The Hoppes started searching in earnest for a home in February. They have lived in the Capital Region since September 2008.
“I’m really glad that we’re able to take advantage of the [credit]. For most people, it’s not the difference for being able to buy a house or not buy a house. It’s a nice incentive,” said Beth Hoppe, 28, an employee of Union College. Hoppe said she hopes to use the funds from the credit to replenish the couple’s savings account or do some interior decorating.
“It’s just nice to know that buying the house isn’t going to empty us out completely,” she said.
All totaled, the National Association of Realtors projects 2.6 million home sales this year, 900,000 to first-time homebuyers, according to NAR spokeswoman Michelle Wardlaw.
Although local statistics for the first-time homebuyers tax credit are not available, the Greater Capital Association of Realtors said the signs of its influence are evident.
GCAR President Laurene Curtin said the median sale price in the area is under $200,000, ideal for the first-time homebuyer.
Anecdotally, area Realtors point to the credit creating more sales volume. “We know that there are a lot of buyers out there that are taking advantage of it,” Curtin said. “Activity is up.”
In her own business as a Realtor with the Albany Realty Group, a majority of her sales over the year have been from first-time homebuyers, she said.
This weekend, there are 500 open houses scheduled in the area to drive more sales before the federal tax credit expires. Curtin said the event, held all over the Capital Region on April 17 and 18, will benefit sellers.
“It should drive a lot of buyers out to look at houses. If there are buyers down to the wire, they’re going to have a lot of opportunities to see homes and maybe find the one they want,” Curtin said.
Spring is the area’s busiest time for Realtors, as the seasonal real estate market goes into overdrive with more inventory and sales volume.
Curtin said low interest rates, affordable pricing and the area’s stability compared with other metropolitan areas create an ideal situation for potential homebuyers.
A full list of open houses for the weekend is available at Gcar.com.
“Obviously, buyers aren’t going to be able to get into all of them, but if they zone in on the areas that they want to live in and their price range, they should really get a good overview on what’s available,” Curtin said.
The Federal Reserve Bank of New York ranked the Albany metro area as the second-best performing area in upstate New York for the annual percentage change in home prices from 2000 to 2006 and 2006 to 2008.
Its report, “Bypassing the Bust: The Stability of Upstate New York’s Housing Markets during the Recession,” showed that home prices in Albany grew 10 percent a year during the 2000-2006 boom, outpacing the nation’s rate of 8 percent. From 2006 to 2008, home prices appreciated by 2.5 percent annually, while nationally they shrank 0.3 percent.
Though the Federal Reserve found the local housing market to be stable, homebuyers in the Capital Region also tapped into more subprime loans than other areas upstate. Subprime loans were faulted for contributing to the collapse of the housing market a few years ago, as homeowners in metro areas in Florida, Nevada and California saw a sharp uptick in foreclosures and mortgage delinquencies.
Albany had a rate of 31.3 subprime loans per 1,000 loans, higher than Glens Falls, 28.6; Elmira, 24.7; Rochester, 24.6; Buffalo, 21.2; Syracuse, 20; Binghamton, 19.7; Utica, 17.5; and Ithaca, 9.4.