The removal of the interest tax deduction is the primary concern of current home buyers.
Annapolis, MD (PRWEB) December 11, 2012
A study taken by Qazzoo.com after President Obama won his second term illustrates what the real estate market may look like over the next six months. At a ratio of 3 to 1, those that participated in the survey were mostly first and second time home buyers compared to those that had purchased more than two homes. The home buyers represented several states. No weight was given to geography, which candidates the respondents voted for nor their political affiliation.
The concept of the survey was to gauge potential home buyers and determine what if anything they think about the effects of the Fiscal Cliff and how this may or may not affect their potential home purchase.
The current real estate market is nowhere near its 2008 bottom yet it is also nowhere near its 2006 high as transactions per year continue to increase. We saw a significant downturn in overall transactions when the Federal Government announced it would eliminate the eight thousand dollar tax credit in 2009 and again in 2010 when in fact the tax credit was officially removed as an incentive.
Greatest concerns for potential home buyers from highest to lowest are:
1. Removal of interest tax deduction (37%)
2. The economy sliding into another recession (33%)
3. Another lowering of interest rates (17%)
4. Inability to determine a good deal (11%)
Although the Simpson Bowles commission did suggest removing the interest tax deduction as part of its deficit reduction strategy, the President has not embraced the idea nor included the elimination of the interest tax deduction with any of his proposals to reduce the deficit. More over the President has not implemented a single item of the Simpson Bowles commission and yet, the loss of the income tax deduction is the single greatest concern for home buyers today at thirty seven percent. When asked why this caused them unease, the majority of respondents identified the fear of potential depreciation as their primary concern.
The second largest group of potential home buyers surveyed indicated that their concern over another recession could depress the market further. This concerns home buyers who fear buying a house today and being underwater with the home soon after purchase. These respondents also indicated that they either have a family member or close associate who is currently upside down on their mortgage or have friends or family who are facing the possibility of foreclosure.
On the other side of the spectrum is the third highest group studied who are concerned that if they were to buy a home in the next six months that they may miss out on another down turn in home prices. These respondents indicated that they were less likely to buy a home in the next three months than those in the first two groups.
The last and smallest group of potential home buyers is most concerned about their ability to identify a home that has the greatest chance of avoiding a negative value fluctuation in the next two to three years. In all, of the over 1,000 surveyed the overriding sentiment was that they wanted to buy a home but that external forces, out of their control, were impeding their ability to make a decision. Eighty seven percent of the respondents also indicated that their concerns were not going to stop them from buying a home if they found the right home at the right price.
Questions regarding job security and the overall economy were not part of the survey.
Qazzoo.com is an online community of over 1 million home buyers and real estate professionals. Membership is free and no home buyers were incentivized to take part in this survey. All home buyers surveyed have expressed interest in buying a home in the next 90 days. Qazzoo surveys are conducted through online questioning of potential home buyers that have self- identified themselves as real estate leads who are members of the Qazzoo.com Real Estate community.