The $8000 tax credit for first-time buyers, passed by Congress last winter, is scheduled to expire on November 30th. It was originally passed to help the troubled economy through a financial crisis. Now the question has become whether the housing market can live without it.

This year, up to 40% of all homebuyers will qualify for the credit. And it’s on track to cost the government $15 billion, more than twice the amount that was projected.

Some analysts believe that this money has been well spent and that the stimulus package should be extended. The credit was supposed to fuel a recovery in the housing market, and that’s exactly what it’s doing. According to the New York Times news service, the credit is responsible for 350,000 – 400,000 homes sold this year.

On the other side are people that argue that the credit is going to people who would have bought homes anyway. They argue that unless the program expires on schedule, it will be one more government program that won’t die.

The National Association of Realtors is lobbying for the government to extend the program through the summer of 2010. Without an extension, proponents argue, there could be a downward movement in home sales and more foreclousures.

Economists agree that housing is a very important industry affecting employment in construction, furniture and appliances, and of course the real estate industry. And housing is where a lot of the problems started. So if we help the housing industry, we will get a lot of benefits compared to helping other sectors of the economy.

The $8000 non-repayable tax credit for first-time buyers is scheduled to expire 14 weeks from now. Will Congress let it expire? The National Association of Realtors and the National Association of Home Builders are working very hard right now to lobby Congress to extend the credit beyond the November 30th expiration date.

As it stands right now, first-time buyers must close their escrows by midnight of November 30th.That means they need to make their offers, get approved for a loan and get the funds, do all necessary investigations, and actually fund the loan and close the escrow. And as most buyers and sellers know, all of this is harder in this market.

The lobbying effort is targeting the two Congressional tax-writing committees, the House Ways and Means Committe, and Senate Finance. Delegations of real estate brokers and home builders are making their way to Congressional district offices to explain why the credit must be extended — number of houses sold attributable to the tax credit and the ripple effect on other industries.

According to economists at the National Association of Realtor, the credit will be responsible for 300,000 – 350,000 additional house sales this year. If we accept these numbers, we see that the housing credit provides a great return for the amount spent.

Congress may be listening. There are bills pending in both houses to extend the credit for another year. The L.A. Times reports that Senator Christopher Dodd, chairman of the Senate Banking Committee, is co-aponsoring a bill with Senator Johnny Isakson that would raise the credit amount to a maximum of $15,000.

It remains doubtful whether an extension can happen before the Nov. 30th deadline. But given the benefits of the housing credit, the odds favor some kind of extension.

First-time buyers in Cardiff, Encinitas, Carsbad, Vista, and San Marcos — and everywhere else in San Diego County — are everywhere, coming out to take advantage of the market. Right now, for these buyers, there are properties at good prices (if they can move fast enough), low interest rates, and an $8000 first-time buyers tax credit waiting for them if they close their escrow before November 30, 2009.

But inventory is low in the price ranges often available to first-time buyers, and serious buyers must be pre-approved and ready to go when they see the property that they want.  There are often multiple offers on these properties within the first few days on the market, and buyers must be ready to “step to the plate,” write their offer, and work with their lender to get their loan approved quickly.

Realtors, like Marilyn Dashe at Century 21 Sea Coast in Encinitas, need to be available nearly 24/7 to respond to the needs of these first-time buyers. These buyers are tech-savvy and part of the internet generation who want instant gratification. They are educated and they don’t want to wait for answers.  They want realtors who can communicate with them through ongoing communication and text messaging.

First-time buyers in the North County of San Diego should take advante of this market ripe for them to buy something now. Call a realtor like Marilyn Dashe and get your search started.

The San Diego Union Tribune reported today that several indices suggest that the housing recession may be improving. San Diego County sold home prices were up for a second month. The S&P/Case-Shiller Home Price Index showed that prices are beginning to rise a little in most large US cities. The Federal Housing Finance Agency house price index rose slightly in May and June. And the Conference Board consumer confidence index rose in July.

Such data may have several beneficial effects on the housing market. Potential home buyers may enter the market, feeling that prices are likely to rise if they wait. Rising prices may encourage people to avoid default since they foresee restoration of equity in their homes.

Most of the increased sales are in lower priced  homes. Higher priced homes are not selling well. But among starter homes there are even cases of competitive bidding pushing the prices up.

This represents more evidence that the housing market is beginning to recover. It may be the ideal time for potential buyers to begin shopping before prices start to rise significantly.

The S%P/Case-Shiller U.S. National Home Price Index reported today by MSN Money showed a 7.2% rise nationally in existing-home sales in July, the biggest month over month increase since 1999. At the same time the Federal Housing Finance Agency quarterly report found prices in 300 cities fell less than 1% from prices in the first quarter. Most of these sales were in starter homes costing less than $250,000.

Analysts attribute the increased sales to the $8000 federal tax credit first-time buyer incentive, low interest rates, and the low prices brought on by the recession and the high foreclosure rate. The apparent stabilization of prices may indicate that the market may have hit bottom, at least in some regions of the country, and prices may be pushed up somewhat by the high interest of first-time buyers. There is pressure on Congress to extend the incentive until 2010 (it expires in Nov. 2009) and to cover buyers other than first-timers.

The obvious conclusion is that this is a good time for first-time buyers with stable finances to consider buying!