Monday, April 6, 2009
Thousands of new homebuyers are taking advantage of a state tax credit intended to jumpstart California's slumping housing market. The credit was part of the state budget deal in February. Analysts say based on the numbers so far, the program is showing signs of success. Steve Shadley (SHAD-Lee) reports.
At this Cambridge Homes development near the Sacramento International Airport, salesman Jake Allen is eager to give tours of this two-story model home. It's full of amenities including an upstairs game room, "but what really makes this house is this huge family room, kitchen breakfast nook that we've got," Allen says. "That's the room that when people walk into it you can just hear them go Ahhh….that's the selling point right there."
Allen has been selling homes in Sacramento for 20 years and says he's never seen the market so slow. But, he's glad there are some new tax incentives encouraging people to start buying new homes again…
"The tax credit is certainly one of the issues out there that people are aware of and I think their distinctly aware of that, the federal one and low interest rates, the combination of all those things really are getting more quality people through the door that can afford to and want to buy a home at this time," Allen says.
The ten-thousand dollar state tax credit comes from a temporary fund of $100-million. Tthe program is over when the money runs out. Buyers can get the credit in installments over three years.
Denise Azimi (as-EE-me) is with the State Franchise Tax Board. She says interest in the tax credit is growing quickly…
"As of April one, 25-percent of the total credit has already been accounted for by people putting in applications," Azimi says.
That's just what Tim Coyle wants to hear. He's senior vice president with the California Building Industry Association which represents home builders…
"In some parts of the state for example our traffic is up significantly and sales in some areas have doubled. And, there seems to be a buzz about the tax credit so it's having its desired effective," Coyle says.
Developers are promoting the state tax credit when they advertise their homes. They're trying to get the attention of home buyers like Scott, who wants to be identified by his first name. Scott recently moved to Sacramento from Chicago and he's looking for a great deal on a three bedroom home.
Scott says he's already aware of the federal tax credit for first time buyers, but he's surprised to learn there's a state incentive. "I wasn't aware that there were two different ones so that's definitely nice. That's a pretty good chunk of money and that will definitely motivate me to move forward," he says.
The state Franchise Tax Board says its updating its website weekly to show how much money is left in the tax credit program. The board will start updating the information on a daily basis when nearly all of the funds are gone. If applications keeping coming in at their current rate the tax credits will end sometime this summer.