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Lancaster County Real Estate First Time Home Buyer Credit

I’ve encountered the question recently, what will values do after the tax credit ends? Fact of the matter is, I don’t know. I don’t believe this tax credit has really done that much to begin with. Will it make or break values after it ends, time will tell. I think they’re many buyers who have the cash and are willing to gamble that values will drop.

I can’t say what I would do if I was looking for my first home at the moment. On one hand values could drop which could increase your buying power, on the other it may not make any difference and you’ll miss out on $8,000 credit.  For example, based on a $100,000 home, for values to drop 8% or more, even at the worst time in our local economy I don’t think values dropped that much, in the under $150,000 range. Your closing costs would be about the same regardless, you may end up saving a thousand at most on overall cost.

Based on normal appreciation we’ve experienced in Lancaster County, you can count on about 3-5% over 5-10 years. So do the math, is it worth taking that cash out of pocket, or not getting the tax credit.