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Incentives open doors
Bill drives interest in first homes, move-ups
Real Estate Break 6 es
Lisa Brooks talks about plans for her future home, for which she and her family will receive a federal tax credit. - photo by Emily Saunders
During a time of year when the industry usually hits a slump, the real estate market could get a boost from federal credits for homebuyers.

A recent bill extended an $8,000 credit to first-time homebuyers that was set to expire Nov. 30.

The measure also introduced a new incentive for current homeowners. As long as their current home has been their primary residence for at least five years, they can receive a $6,500 credit toward the purchase of a new home.

Forsyth County Realtor Gloria Buice said the bill should spark activity during the otherwise slow holiday season. And the $6,500 credit could help attract buyers to homes in the $300,000 price range.

“I think what we’re going to see is more people who own a home scaling up,” she said. “I think they see what a fantastic bargain homes are right now, so I think we’ll see more move-ups.

“I don’t think we’ll get to the extremely high end of homes over $500,000, but I think it will certainly increase the market that has been slow, which is the $250,000 and above.”

Dubbed the move-up credit, the new addition to the homebuyer credit does have some limits.

Homes cannot exceed $800,000 and income limits are $125,000 for an individual or $225,000 per couple. The income limits also apply to first-time homebuyers.

Frank Norton Jr., a regional housing expert and president of Gainesville-based Norton Agency, said October sales were stronger than the same time last year. He attributed that largely to first-time homebuyers rushing to take advantage of the credits before the deal was to expire.

While first-time homebuyers will continue to qualify for the credit, Norton said, “I think we’re going to see a bigger response over the $6,500 credit because those people were frozen out of the home-buying market previously.”

“That new credit expands the market significantly and includes so many more people. In the long term, as we sell these houses, we’re stabilizing the market.”

With a son just a few years from graduating high school, Lisa and Jason Brooks decided to browse the local housing market for a smaller home with less yard.

They began their search about a month ago, not planning to buy for another year or two. But the combination of a good deal and the tax credit stirred them to action.

The two are under contract for a bank-owned Cumming property near some close friends.

“We were looking because of the great deals on homes right now,” Lisa Brooks said. “I think [the credit] is a great bonus ... so we are excited to do it.”

Though the $6,500 credit targets homeowners looking to upgrade to a larger home, the incentive also applies to anyone looking for a change of scenery.

Brooks said they are not alone.

“There are actually a lot of people ... trying to downsize, especially for people like ourselves with a child going off to college in a couple of years,” she said.

The deadline for both the $8,000 extension and the $6,500 credit is April 30. The contract must be written by then, and the new owner must close on the home before July 1.

Realtor John Heath said about 40 percent of area homebuyers are in the first-time category. While he said the credit is enticing, “I’ve had several people who don’t own homes that say it’s not going to make them buy a house.”

For people who were in the market but not quite ready, he said, it “may get you off the fence.”

There could also be concern that once the credits do expire, the market will sink to pre-relief numbers. But Norton said the biggest issue is not that sales will stop.

“It is that it only appeals to a certain segment of the marketplace,” he said. “And it is our hope that by April, when they all ... expire, that the majority of people that did qualify for these two credits have already done something with their house.”

Buice said many of her properties are in Forsyth, but because of the current market “we find ourselves going a little farther out of our usual selling area ... for the lower-priced homes.”

Still, Buice is excited to offer clients a range of price points.

“It’s been great to see people get into homes and know they’re going to get a great tax credit for it.”