John Rebchook is a former Rocky Mountain News reporter with more than 30 years of experience in writing and communications... Shannon Peer, like Realtors in Denver and across the nation, applauds President Obama today signing an extension of the $8,000 tax credit for first-time home buyers and expanding it to include a $6,500 credit for people buying homes that have lived in their current house for at least five years.
“I think it is a positive thing for our market currently here in Denver,” Peer said. “We have such low inventories and prices are still very low as well. So being where we are in the market, this is a good incentive,” he said about the legislation signed by Obama.
But Peer is not a Realtor.
As the Housing Counseling Manager for Edgewater-based Brothers Redevelopment, which has helped thousands of homeowners in Colorado avoid or deal with foreclosure, he has another take on the tax credits.
“My concern is that the credits might cause some people to rush into homeownership,” Peer said. “We have been trying to promote education along with the incentives. We have some fears, that especially first-home buyers that are buying only for the tax credits, who might not buy otherwise, might run into problems down the line.”
Indeed, he said if someone can only afford to buy a home with the help of the tax credits, they might not be a good candidate to buy a home at this time.
I asked Peer if the tax credits could actually result in more people eventually losing their homes to foreclosure.
“That’s hard to say if that is true or not,” Peer said. “Over the past couple of years, with prices have dropped, and so many people have been on the fence. A number of people have worried that they might be buying too early and prices could fall more.”
The tax credits, however, could help bring stability to the market with more buyers, and especially in the Denver area, could help reinforce that the housing market is coming off the bottom, Peer and Realtors say.
“My feeling now is that we’re getting out 0ur promotion of homeownership, which is good, but we do not want people to jump in who are not ready to be homeowners, just because of the tax credits,” he said.
“I wonder if we missed an opportunity to require some kind of counseling before people can take advantage of the tax credits,” Peer said, much like the Colorado Housing and Finance Authority does, when buyers take advantage of its programs. Also, Fannie Mae and Freddie Mac have an educational component with some of its programs, he said.
“Of course, I was not involved in that decision,” Peer said. “Maybe the experts consulted thought that would uave made the program too cumbersome and unwieldy.”
Still, he encouraged people to contact Brothers at this link or call 303-202-6340. You don’t need to be in danger of losing your home to contact the non-profit Brothers, which will put you in touch the the appropriate HUD-approve counselor for no charge.
“We have counselors who can give advice to first-time home buyers and existing home owners,” Peer said. “I’m sure there are people out there who have owned a home for 10 years, but since they haven’t purchased a home in 10 years, buying a home is really new again to them. We have a wide-array of counselors available.”
He said they have even discussed setting up a number similar to Colorado Foreclosure Hotline, for people seeking advice on how to avoid financial problems when buying a home.
I asked him if what they are doing is similar to preventive medicine, as opposed to treating the sickness.
“Definitely,” he said.
Contact John Rebchook at JRCHOOK@gmail.com or 303-945-6865.
