This week's big news in residential real estate is the extension and expansion of the Federal First Time Homebuyer Credit.  Here are the highlights...

The deadline for contracting (to take advantage of the credit) is now April 30, 2010. 

• Income limits have been increased from $75,000 to $125,000 for individuals and an increase from $150,000 to $225,000 for couples for full advantage of the credit.
• A new $6500 credit for existing home owners.  The catch is that the homeowner must have been in their current owned residence for five consecutive years of the last eight.
• The home purchased cannot be more than $800,000.
• Broader investigative power to ensure fraud does not occur.

The first eleven months of the First Time Home Buyer Credit had a major impact upon the local housing market.  The price points impacted the most have been under $250,000 and in MLS areas from the N/E side of Colorado Springs to Powers to Fountain.  The continued influx of mobile professionals, military and civilian, will be able to take advantage of the credit.  This is great news for sellers concerned they may have missed out.

The weak area of the market on a local and national level has been in the move up range; those homeowners who would be looking to purchase their second or third home.  Even though interest rates and overall values are unbeatable, many are spooked and not willing to take a risk.  The intent of the new tier to this credit is to get these folks motivated.  Locally, this would help the $275,000 to $400,000 price range.  This credit applies to new construction and existing homes alike.

With the expansion of the program to include additional eligible homebuyers and increase to income limits, we are confident that this will be a terrific jumpstart to the 2010 real estate season.  The extension and expansion are controversial but widely supported for this current extension.  It is very unlikely that there would be an additional extension so we will encourage our clients to act if this program makes sense for their situation.