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The Franchise Tax Board reports that as of June 3, 8,522 Californians had applied for $82.5 million in tax credits for buying a newly built residence between this past March 1 and March 1, 2010.

The credit, worth up to $10,000 to the buyers, is capped at $100 million on a first-come, first-served basis. Assuming all the applications meet the rules, just 17.5% of the money is left in a program that’s not even three months old.

Meanwhile, the California Building Industry Association released figures showing “signs of stabilization” in the new-home market, saying that the tax credit was partly responsible.

State BIA CEO Robert Rivinius called on state government to extend the credit to help bolster new-home sales and development:

“The good news is becoming bad news as there are only a few tax credits left. To keep the momentum going it’s critical that the Legislature and the Governor act quickly to renew the credit. Historically, the housing industry is what leads the nation out of recessions.”

Costa Mesa-based Hanley Wood Market Intelligence reported that while California new-home purchase contracts were down 30.5% in April from the year before, sales have climbed steadily in the months since the tax credit went into effect. The research firm reported that:

• Buyers signed contracts to buy 2,771 new homes in April, down from the year before for the third consecutive April.
• Overall, sales contracts have declined 67% since April 2006, when 8,407 contracts were signed.
• But California new-home sales have increased 148% since December, when they fell to the lowest point in Hanley Wood’s records: 1,117.

Hanley Wood reported that April’s year-over-year percentage drop was the smallest since January 2007, suggesting that the market is stabilizing, said Jonathan Dienhard, Hanley Wood’s director of published research. He added:

“We’re definitely headed in the right direction. Aggressive pricing by builders and tax incentives seem to be helping stabilize the pace of new home sales despite substantial competition from the resale market in the form of foreclosures.”

To see the CBIA/Hanley Wood press release, CLICK HERE!

To see data charts, CLICK HERE!

Other housing news …

• Is tax credit giving builders a boost?
• St. Regis owners, lenders face big losses
• Should St. Regis declare bankruptcy?
• Two more years of home-price declines?
• Economists disparage foreclosure relief
• O.C. builder buys its bonds back, 72% off!
• Short sale nightmares wherever you look?
• ‘Real Housewives’ Coto home in default
• Tax credit no cure for O.C. builders
• What the heck is up with that $8K tax credit?
• Big investors show 95% less love for O.C. property
• How bad did Greenspan blow it?
• Foreclosure is the ‘cure’
• Once top subprime lender settles suit
• Will a football stadium hurt Turtle Rock home values?
• $2 million house with warning: ‘Watch your step!’
• Laguna home listed at $2.7 million sells for $3.55 million
• South county commissioner’s home off to auction
• Irvine Dream Raffle extends ticket deadline

Posted in: Brokers, builders, etc. • Top tale • numbers • tax credit |

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