Buyers scramble to take advantage of tax credit

With just one month to go before the end of the first time home buyer’s tax credit, house hunters are eagerly trying to wrap up paperwork on their purchases in time to get up to $8,000 back from the federal government.

With just one month to go before the end of the first time home buyer’s tax credit, house hunters are eagerly trying to wrap up paperwork on their purchases in time to get up to $8,000 back from the federal government.

It’s unclear whether the tax credit has improved the economy, as it was intended to do. But Temple University Finance Professor Bruce Rader says, annecdotally, it’s definitely had an effect on the housing market.

However, he says, the end of the tax credit will likely bring with it a slump in home sales.

“Whenever you stop one of these kind of programs,” Rader said, “what happens is that you’re basically pre-loading demand. And so I think you’ll see a little bit of a slowdown, maybe prices go down a little, but I think you’ve taken a lot of supply off the market, so I think that’s a good thing.”

Rader says the Philadelphia area fared a little better than the rest of the nation during the housing crisis, so it’s not seeing as much of a rise in home prices. But he says Center City, which saw rapid condo development, is mirroring the national trend of rising prices and more sales.