For first-time homebuyers, an $8,000 federal tax credit is good — but not good enough.
That’s the reaction of Syracuse-Area real estate brokers to the recently enacted federal stimulus package. The $8,000 tax credit is a cut from a $15,000 credit the brokers had hoped for.
“It stems down to money. I hate to say it but it came down to Congress and the president deciding the money could be used elsewhere,” said Dave Manzano, president of the Syracuse Board of Realtors and associate broker with Hunt Real Estate. After all, Manzano said the nation’s “housing crisis” has been at the root of the economic meltdown.
Manzano and other real estate agents in the area acknowledge that the Syracuse housing market is in better shape than the rest of the nation. They praised the federal stimulus for offering some help for first-time homebuyers. But local agents expressed disappointment that the original $15,000 tax credit was not included in the bill.
“I guess the powers at be in their infinite wisdom decided it was better to give a smaller handout,” said Manzano. “I guess you can’t have your cake and eat it too.”
The $15,000 tax credit for all home buyers was originally proposed in the Senate, but was dropped when the Senate and the House of Representatives reconciled their versions of the stimulus package. The final $787.2 billion stimulus measure signed by President Barack Obama included the $8,000 tax credit only for first-time buyers.
But the tax credit will still help the housing market, Manzano said, even if he isn’t pleased everything wasn’t included. “It will definitely have an impact. I really do feel that,” said Manzano.
Manzano says the effects of people buying a home are widespread. People spend money to renovate their home before selling, he said, and contractors and stores like Lowe’s and Home Depot see increases in business.
Other local real estate agents agree the stimulus will help, but want to see local government step up their efforts here in Syracuse in conjunction with Washington, D.C., policy.
“A lot more can be done here, especially like property tax relief,” said Jeff Roney, a Realtor with Keller Williams Realty and former president of the Syracuse Board of Realtors.
Property taxes in Onondaga County are 2.6 percent of a home’s assessed value, according to Tax Foundation, a non-partisan organization that researches tax policy. The median taxes on a home here are $2, 9182 a year for a three-bedroom home. That’s the 13th highest tax rate in the nation, according to Tax Foundation.
The stimulus will help here and nationally if it can put people to work, Roney of Keller Williams said. People who have jobs and a stable income are more likely to make a decision on a huge purchase such as a home, he said.
The housing market in the Syracuse area has fared better than other parts of the country, he said. “The Syracuse area did not take on high-risk mortgages, and home prices never skyrocketed like they did elsewhere. So we’ve also had a lower foreclosure rate. We’ve been lucky,” said Roney.
In Onondaga County, according to the Syracuse Association of Realtors, the median price of a three-bedroom home in January of 2008 has dropped 5.94 percent compared to 2007. In 2007, the median price was $110,300. Now the same three-bedroom home is listed at $104,113. That compares to a 10.55 percent decrease nationally in the median home price of a three-bedroom home. Nationally, the median home price fell from $217,900 in 2007 to $197,100 in 2008.
Alys Mann of Home HeadQuarters praises local government for some efforts to increase home ownership. Mann is a neighborhood planner for Home HeadQuarters in Syracuse, a not-for-profit organization that creates home ownership opportunities. Local government has taken steps to help, she says.
“I think the local government has been doing all they can, considering the tough circumstances we are in. It hasn’t been easy on them,” Mann said.
Mann points to a year-old government program that allows not-for-profit organizations to buy tax delinquent properties for one dollar. Another new program keeps taxes lower on newly renovated homes by assessing them at their value before the renovations, she said.
Those programs allow agencies like Home HeadQuarters, says Mann, to buy these tax delinquent properties, renovate them, but still keep the property taxes low for new buyers. But, Mann said, that the best medicine for the local housing market is to just create a stir.
“The bottom line,” said Mann, “is we need to get people excited about this city, about city living, and about all that Syracuse has to offer.”
(Matt Cohen is a junior with dual majors in broadcast journalism and history.)
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