Market Conditions in 22203>Question Details

Kerrysullivan, Other/Just Looking in 22203

Does anyone know about how many former apartment renters have taken advantage of the first-time homebuyer tax credit?

Asked by Kerrysullivan, 22203 Fri Oct 16, 2009

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Assuming Matt's number of 1.8-2.0 million is correct (the IRS says 1.4 million had done so by September 17--see http://www.irs.gov/newsroom/article/0,,id=213375,00.html ), I'd guess the actual number might be in the range of 1.3-1.4 million.

The large majority of the 1.8-2.0 million will have been renters. However, that doesn't take into consideration the number of college graduates (and some high school graduates) who might not have previously been classified as renters. According to the Bureau of Labor Statistics, an estimated 1.24 million bachelor degrees were awarded in 2008. See http://www.bls.gov/opub/ooq/2000/Fall/art01.pdf So, add in a few more who graduated from graduate school, subtract about the same number who probably went on to graduate school, and throw in some high school graduates, and you have an additional population of at least 1.25 million eligible buyers. True, a lot of them will rent. Some will return home to live with their parents. But let's say that 10% of them buy. Maybe they saved the money themselves. Maybe their parents helped with the down payment. (Anything to keep Junior from moving back in!) Maybe after 21 years they were just tired of living at home, living in dorms, etc., and finally wanted a place of their own. I'd be willing to guess that at least 125,000 college graduates (and probably closer to 200,000, maybe even higher) purchased a home in 2009.

Hope that helps.
0 votes Thank Flag Link Sat Oct 17, 2009
Don Tepper, Real Estate Pro in Fairfax, VA
MVP'08
Contact
Kerry,
We probably will not get precise numbers until the tax filing deadlines are passed.
But the credit surely has done what it was supposed to do.
Web Reference: http://www.mokaiser.com
0 votes Thank Flag Link Sat Oct 17, 2009
Kerry,
Before the Nov. 30th deadline between 1.8 and 2 million people will have cashed in on the tax credit. The credit excludes anyone who has owned a home in the last three years, so the vast majority of the 1.8 and 2 million people are renters. I hope this helps.
Best,
Matt
0 votes Thank Flag Link Fri Oct 16, 2009
Adding to Cindy's comments, we need to look at the aspect that the people who intended to buy anyway, spend the $8k mostly upgrading the house/appliances. That is one of the aspects helping the economy.
rgds,
Ramesh handra
703 635 8209
mepcigroup@gmail.com
0 votes Thank Flag Link Fri Oct 16, 2009
Personally myself, I have settled on 6 homes in the past 2 months that are all former renters (apartment or townhome), looking to cash in on the tax credit. If you have the stability to do so, make your move fast!
0 votes Thank Flag Link Fri Oct 16, 2009
That is almost an impossible qs to answer with any amount of accuracy.
The only statistic that has publicly come out is that it is estimated that the total credits the feds have to spend is double the original budget.
That is what is hampering the extension of Nov. 30th time limit.
But it is widely anticipated that there will be an extension.
rgds,
Ramesh handra
703 635 8209
mepcigroup@gmail.com
0 votes Thank Flag Link Fri Oct 16, 2009
From a Brookings Study:

"Approximately 1.9 million buyers are expected to receive the credit, but more than 85 percent of these would have bought a home without the credit. This suggests a price tax of about $15 billion – which is twice what Congress intended – for approximately 350,000 additional home sales. At $43,000 per new home sale, this is a very expensive subsidy. "
0 votes Thank Flag Link Fri Oct 16, 2009
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