First-Time Homebuyer Tax Credit Deadline Nears, Creates Mad Dash to Close

"I'm worried that the government's going to go broke. Sooner or later, we need to get used to natural levels of demand for the market," he said. Even if the program is extended, we've reached a point where there will be lull in activity after November. There's been so much activity trying to beat the deadline, even if that deadline were extended, I just think there are so many people who have been running for the finish line in November."

Homeowner Tax Credit: Clock Ticking

There is no way for certain to know how many people are taking advantage of this tax credit. Those figures will roll in after Americans file their personal income tax returns on April 15. But Lawrence Yun, chief economist at the National Association of Realtors, estimates that 1.1 million first-time homebuyers had taken advantage of the credit as of Aug. 31. (Back in February, when the tax credit became law, Yun predicted 300,000 sales would occur as a result of the program.)

Even with 1.1 million sales already closed, Yun -- like others -- still sees the sales pace increasing as the summer comes to a close.

"We have seen steadily rising sales with each successive month," Yun said. "The momentum is building. We attribute that partly to people not wanting to miss out on that deadline."

The National Association of Realtors believes "it is critical" to extend the deadline, Yun said, because many people risk missing the deadline. He said they realistically have to have the home under contract in the next three to four weeks.

'Mad Rush'

Chuck Whitehead, is the general manager and a partner with Coldwell Banker in Temecula, Calif., about 20 minutes from San Diego.

"In our area it's an absolutely mad rush to meet that deadline. I mean a mad rush," he said.

One of his clients made an offer on bank-owned house Friday, the first offer made. By the time it got presented to the bank Monday morning, there were 57 offers.

"There's such a frenzy going on with everybody trying to get in before this deadline. It's crazy. I feel for the kids that won't be able to get in after December 1 because the bottom line is: if they don't have this credit, they can't buy a house," Whitehead said.

One couple, a flight attendant and mechanic, are renting a converted garage to save some money for their down payment.

"They need that $8,000 tax credit to do the repairs on their house, if they get into one. Everything they are looking at is going to need some work," Whitehead said. "The sad part for them is: when this credit goes away, so does their opportunity to buy."

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