First time home buyers tax credit (Long Beach: sales, renting, condo)

[Lost Leaf]

Lately I had been looking to purchase a low end condo in So Cal because for one I was interested in living there but also to earn the first time home buyer tax credit of 8k. Well it looks like I misunderstood the terms and conditions because I was planning on renting the place out until I could find a job down there but apprently you must live in the home for 3 years or face paying the credit back. Oh well, just wanted to say thanks for everyone for giving me info on the LA area, looks like I'll have to wait a while longer to relocate.

[ehcsrop]

You're going to let the 8K credit determine the deal? That doesn't seem right. Sure, it would be nice to have a tax credit like that, but once done, you still have your regular obligation. If you buy and rent, you may have some tax advantages there, but if you don't own a primary residence an you have good income, you are overlooking something.

I don't think your plan was too solid to begin with. I don't say that in a mean way. I say that because you have learned one thing; there are a few more things to learn before you buy anything.

[Lost Leaf]

Originally Posted by ehcsrop

You're going to let the 8K credit determine the deal? That doesn't seem right. Sure, it would be nice to have a tax credit like that, but once done, you still have your regular obligation. If you buy and rent, you may have some tax advantages there, but if you don't own a primary residence an you have good income, you are overlooking something.

I don't think your plan was too solid to begin with. I don't say that in a mean way. I say that because you have learned one thing; there are a few more things to learn before you buy anything.

Well yes it is not the most solid plan but I figure if I'm gonna buy, I might as well buy now since were pretty much at the bottom for low end properties and the tax credit is just icing on the cake. The thing that mostly worries me is missing out on a great deal, I mean looking at the charts prices are already stating to creep back up, I don't understand why...prices are already rising again it doesn't make any sense, I mean the economy is still rocky and unemployment hasn't budged.

[SOON2BNSURPRISE]

The rise you see is a bump that will not continue. Home prices will more than likely decline. Even the original reason for the incentive was not to give away money at the bottom of the market but to entice people to buy so that when prices decline further they would not grumble too much about loosing money after the purchase. Remember that the last people to buy purchased homes that they could not afford with loans that did not pay down the debt. When you buy with a 5 year fixed ARM that resets and priced decline you are in trouble. People in 2007 were still buying and with loans that have issues. The value of their homes is half what it was when they bought and they will not be able to refinance their homes. What does that do? It gets us into 2012 before the end is near. Compound that with the regions unemployment rate now over 10% I think. In some communities it is even worse. We have the signs of prices falling further.

[Lost Leaf]

Originally Posted by SOON2BNSURPRISE

The rise you see is a bump that will not continue. Home prices will more than likely decline. Even the original reason for the incentive was not to give away money at the bottom of the market but to entice people to buy so that when prices decline further they would not grumble too much about loosing money after the purchase. Remember that the last people to buy purchased homes that they could not afford with loans that did not pay down the debt. When you buy with a 5 year fixed ARM that resets and priced decline you are in trouble. People in 2007 were still buying and with loans that have issues. The value of their homes is half what it was when they bought and they will not be able to refinance their homes. What does that do? It gets us into 2012 before the end is near. Compound that with the regions unemployment rate now over 10% I think. In some communities it is even worse. We have the signs of prices falling further.

Yes good point, the tax credit is the carrot on the stick and sales will most likely decline again once the carrot is gone just the same way car sales dropped back down once cash for clunkers expired. You know the saying, the best things come to those who wait.

[ZenMaster2008]

Originally Posted by Lost Leaf

Yes good point, the tax credit is the carrot on the stick and sales will most likely decline again once the carrot is gone just the same way car sales dropped back down once cash for clunkers expired. You know the saying, the best things come to those who wait.

I thought it was "Early bird gets the worm"?

[ehcsrop]

The LA Times reports today that 2 zip codes in Long Beach are up in prices as much as 24% over a year ago and one zip is only down 4%. With interest down, this is the time to buy. That would be especially true if there is an income involved.

I've shown my step daughter that she would net out better if she bought today and the property value slid another 10% over 2 years. Yes, she would save that much money on her taxes. Of course, the total price of the property drives the equation. So, let just say somewhere around LA's median.

[LABornandRaised]

I just refiled my taxes to get an early receipt of my first time home buyers credit. I hear it's taking over 12 weeks to get the credit because of all the cash for clunkers applications yet to be processed. That money couldn't come any sooner too.