Locals Look for Boost in Housing Market From Tax Credit Extension

SAVANNAH, Ga. -- On Friday President Barack Obama will sign a bill that expands a popular home buyers tax credit. The $8,000 tax credit for first-time homebuyers would be extended for seven months. The bill also adds a $6,500 credit for some homebuyers who have owned a home for at least five years.

"For Sale" signs dot the landscape in neighborhoods all around the country. But there's new hope every where after the extension of the tax credit for home buyers.

"We are so excited that this has passed. It's something that we needed," said Molly Bridges, president of the Savannah Board of Realtors.

Bridges said the extension and new credit for existing homeowners will open the door to new sales.

"People who have been hesitant to get out into the market now may get out in the market because of this tax incentive, so we're hoping this will spur a whole new crop of sales that will help our industry and also help as a trickle down effect in the local economy," said Bridges.

The boost to the housing industry is what Dewayne Lockhart hopes will help sell his home on Pampas Drive in Godley Station. He said three realtors told him the tax credit extension would be key to a sale.

"It allows me to sell the house at a fair market value, and them to include the $8,000 for closing cost or $8,000 for something else that they want to do," said Lockhart.

But he doesn't agree with the restrictions on the credits.

"It's not my first home, and I haven't lived here 5 years. I'm selling my home for different reasons and to reduce my overhead. Neither case does it benefit me," he said.

The first time homeowner tax credit is extended through June, as long as the buyer signs a contract by the end of April.

As for the credit for existing homeowners, the income limits have changed, and the home you're buying must become your new primary residence.

The two tax credits will cost more than $10 billion over 10 years. They're being paid for by delaying enactment of a tax benefit for international companies.