Remember the federal tax credit programs offering $7,500 and later $8,000 to first-time homebuyers? The credits were designed to deliver a jolt to the reeling housing industry and they did: More than 4 million people applied for and have received nearly $30 billion worth of credits.

Most of them, according to the IRS — the sole federal agency that administers the credits — went to people who legitimately qualified for the credits. But a series of audits by the Treasury’s inspector general for tax administration has documented foul-ups by the IRS, ranging from credits granted to prison inmates and dead people, fraud schemes involving claimants who never bought a house and even credits for alleged home purchases by teenagers and kids as young as three years old.
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The housing market is suffering more than expected following the expiration of the government’s $8,000 tax credit. Preliminary nationwide data indicates the decline began last month right after the credit was no longer available, with sales dropping more than 20 percent from May 2009, the New York Times reported. Builders have also been affected, as construction of new homes in May dropped 17.2 percent from April, according to the Department of Commerce. Mortgage applications were down by a third in May compared to last year, according to the Mortgage Bankers Association. Amidst this slump, buyers are reportedly becoming pickier, with more deals falling through and less contracts being signed. [NYT]

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The housing market is suffering more than expected following the expiration of the government’s $8,000 tax credit. Preliminary nationwide data indicates the decline began last month right after the credit was no longer available, with sales dropping more than 20 percent from May 2009, the New York Times reported. Builders have also been affected, as construction of new homes in May dropped 17.2 percent from April, according to the Department of Commerce. Mortgage applications were down by a third in May compared to last year, according to the Mortgage Bankers Association. Amidst this slump, buyers are reportedly becoming pickier, with more deals falling through and less contracts being signed. [NYT]

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While the debate over whether to buy or rent rages on in New York City, Coldwell Banker CEO Jim Gillespie says that now is the time to make a home purchase nationally. The real estate group recently conducted a survey outlining the reasons to buy a new pad, ranging from the federal allowances to market stability. Gillespie told ABC News that major incentives, including the first-time homebuyer tax credit and dramatically lower prices in some states, particularly in Florida, are making the housing market especially favorable for buyers.

(Clockwise from left) Brokers Richard Steinberg, Steve Kliegerman, Stacey Max, and Victoria Shtainer talk about real estate priorities post-election.

New construction helped define the legacy of Michael Bloomberg’s first two terms as mayor, whether it was parks, schools, apartments, or more controversial mega-projects. That came in lockstep with a wholesale reordering of what should go where in New York, as Bloomberg rezoned 20 percent of the city, which was the most in four decades. But in Bloomberg’s third term, which he won yesterday in a close election against city Comptroller William Thompson, the city’s real estate community seems focused on different issues — some more far-reaching than others.
Some brokers hope lessons have been learned, like with the Second Avenue Subway, whose famously disruptive construction has hurt sales at the Upper East Side’s Georgica condo, said Richard Steinberg, an executive managing director with Warburg Realty Partnership. [more]

November 30 is just around the corner, when a first-time homebuyer must
close on the purchase of a residence to qualify for the $8,000 tax
credit. The tax-credit law requires the buyer to close on their
purchase, not just be under contract for a purchase of the residence.
The tax credit is actually equal to 10 percent of the home’s purchase price up to a maximum credit of $8,000.
First-time homebuyers are eligible for the credit if they have not
owned a principal residence for three years prior to the purchase. The
credit phases out between $75,000 and $95,000 for singles and $150,000
to $170,000 for married couples filing jointly.
The tax credit does not have to be repaid as long as the home is the
homebuyer’s main home for 36 months after the purchase date. [more]

According to national survey released today by Realtor.com, 53 percent
of potential homebuyers are not taking the plunge anytime soon. Nearly
a third cited concerns about job security as the main reason for not
entering the housing market. Meanwhile, one in five potential
homebuyers said they would be interested in buying a home if it was
steeply discounted, but nearly two-thirds surveyed said they would be
unlikely to purchase a foreclosed home due to the complicated process.
Also, while 41 percent of those surveyed said they didn’t think the
Obama administration’s $50 billion dollar foreclosure prevention plan
is working, 15 percent said they are looking to take advantage of the
$8,000 first-time homebuyer tax credit. [more]