Market Update > As of November 1 In the upcoming weeks, the Senate and House of Representatives will vote to determine whether to extend the $8,000 tax credit beyond the Nov. 30 deadline and/or to expand it. According to Bloomberg News, here are the details in a nutshell: An extension would allow first time homebuyers continued access to the $8,000 tax credit for home purchases that go under contract by April 30, 2010, with another 60 days to close on the sale. An expansion would provide qualified current homeowners a $6,500 credit if they have lived in their residence for at least five years (the Minneapolis Area Association of REALTORS® reports $6,250), and the homebuyers’ credit would be available to individuals earning up to $125,000 or couples earning up to $250,000. This credit would also be available for home purchases under contract by April 30, 2010, with another 60 days to close on the sale. Key points surrounding the current $8,000 tax credit and the proposed expansion: The $8,000 tax credit has helped move a lot of the foreclosure inventory. In fact, there are roughly only two to three months of inventory in properties priced $120,000 and below, which is a price point in demand among first time homebuyers. The proposed expansion will help the next segment of the market – the move-up buyer, who would be more likely to negotiate on the sale of their home with this incentive. We expect the foreclosure inventory next year to include more properties in the move-up price range, so this incentive would likely help move that inventory as well. While concerns about the tax credit creating an artificial market recovery exist, it’s important to acknowledge that the tax credit has provided a tangible opportunity for people who may not have otherwise been able to buy a home. And, additional mortgage regulations and consumer protections have been established to help move us toward long-term market recovery. Home sales in September and October were robust, according to the Minneapolis Area Association of REALTORS® (MAAR). This is no doubt a result of first-time homebuyers rushing to capitalize on the tax credit before it expires. In fact, MAAR reported that almost two-thirds of the 954 pending sales in the week ending Oct. 17 were priced below $190,000. October will mark the 16th consecutive month of year-over-year increases in pending sales with a healthy portion of these sales taking place in price ranges below $200,000. If the tax credit is not extended, we expect to see home sales begin to drop as we near the Nov. 30 deadline