› News Release

Homebuyers' tax credit has foes, backers

San Diego Union Tribune -- When Congress passed an $8,000 tax credit for first-time homebuyers last winter, it was intended as a dose of shock therapy during a crisis. Now the question is becoming whether the housing market can function without it.

As many as 40 percent of homebuyers this year will qualify for the credit. It is on track to cost $15 billion, more than twice the amount that was projected when Congress passed the stimulus bill in February.

In the view of the real estate industry and some economists, all that money is well spent. They contend the credit is doing what it was meant to do, encouraging a recovery in the housing market that is gathering steam. Analysts say the credit is directly responsible for several hundred thousand home sales.

...

Alan Gin, economist at the Burnham-Moores Center for Real Estate at the University of San Diego, said the tax credit has been less useful to San Diego buyers because local home prices are much higher than the national average. In the second quarter, the National Association of Home Builders said the median home price was $285,000 in San Diego and $177,000 nationally.

“A bigger factor is that prices have come down 40 percent and interest rates are really low,” Gin said. “The combination makes buying really attractive.” (Full Story)