Real Estate's Next Chapter

What happens now that the federal home buyer tax credit has expired?

June 1, 2010

The federal tax credit for home buyers has come to an end. Most buyers had to have a contract in writing by the end of April in order to qualify, and transactions must close by the end of June.

Now the big question is: Did the incentive do its job? By all accounts so far, yes.

There’s no way of knowing until later this summer exactly how many people took advantage of the federal government’s incentive, which applied for qualified buyers beginning in January 2009.

However, existing-home sales and median price data from the NATIONAL ASSOCIATION OF REALTORS® indicates that the tax credit brought buyers into the market, reduced inventories, and helped stabilize home prices around the country.

The tax credit was a great example of how we benefit from having a strong voice in Washington. But with the end of the credit, you may feel as if you’ve lost a piece of your marketing arsenal.

Here’s another way to look at it: as a new beginning. Real estate has emerged healthier and stronger than it was in 2008. We needed the tax credit to help normalize the market; now it’s time for the market to stand on its own legs.

For REALTORS® who specialize in residential sales, this is a time to embrace your role of helping clients find a home they can afford in a neighborhood they love.

It’s time to showcase your market knowledge and educate clients about why it’s still smart to buy a house or condominium—not only because of attractive interest rates and homeowner tax deductions, but because home is where we make memories, build our future, and feel secure.

This is the message NAR is communicating through new Public Awareness Campaign advertisements, titled "What Matters Most."

Our ads on the radio, on television, and in print emphasize the value of owning a home and convey that REALTORS® are the fabric of communities—providing valuable service to buyers, sellers, and investors, while maintaining high standards of practice.

Yes, selling homes without the credit will continue to present challenges, most notably in the financial arena. That’s why, in May, we brought together policy makers and analysts for our second annual Real Estate Summit—part of the  REALTORS® Midyear Legislative Meetings in Washington, D.C.

One of our main priorities, from the summit and from our advocacy work in Washington, is to lead the way to ensuring a steady flow of capital for mortgages.

After all, we’re still a nation of home owners. Despite all the troubles we’ve been through as a nation, the homeownership rate in the first quarter of 2010 stood at 67.1 percent, according to the U.S. Census Bureau.

In June, as we observe National Homeownership Month, let’s celebrate the fact that the housing industry continues to be the backbone of our country’s economy.

Vicki L. Cox Golder

Vicki L. Cox Golder was 2010 president of the National Association of REALTORS®.