N.J. Home buyer tax credit - will it happen?

Is the N.J. home buyer tax credit in jeopardy? That's the question being asked in a news report from Channel 3 in Philadelphia.

"A bill that some say would reenergize New Jersey's housing market is still sitting on the desk of Governor Chris Christie.

"It's a spend money to make money, create jobs and create commerce initiative."

Patrick Murray, on Newsroom New Jersey, asks a question, what's the bottom line on the bill's effectiveness?

Well, what happens after the credit program is shut down? Do those buyers stay in the market and keep housing demand high? If we look at the experience of the federal credit program, the answer appears to be "No."

The numbers are even more astounding if we look at how the credit will apply to sales of existing homes. According to state figures, more than 110,000 existing houses were resold last year. That translates to about 300 a day. This means the $25 million pot for existing home sales tax credits will be snapped up within a week of the program going into effect. One week!

Considering how lengthy the sales and mortgage process is, a homebuyer's likelihood of closing on their purchase within the seven day window this credit program is available will be more a matter of luck than planning. "Mr. and Mrs. Jones, here are the keys to your house, and congratulations — you just won $15,000!"

The bill is seen as a jump-start, more like a defibrillator, if you ask me, for New Jersey's ailing housing market. The idea is to give home buyers a $15,000 tax credit or get back 5 percent of the price, whichever is less. The money would be paid over three years. You can read the bill here.

We'll keep you posted.

If you have questions about what you see here,
contact Stephen M. Flatow
Stephen's Title Agency, LLC
StephensTitle@comcast.net
973-556-1628 Fax