This year, for the first time since 2006, home prices increased nationwide. But here in Naperville, sales are still lagging behind. One reason for the nationwide spike is the federal first time home buyers tax credit, which gave an $8,000 federal tax credit to first time homebuyers. The credit, which expires on April 30, is one of the reasons the Barker family bought a home in Napervlle.
For the Barkers, who had been renting in Naperville for more than three years, it’s now time to get settled.
“We’re very happy about (moving in),” Brook Barker said. “We were renting for way too long and we’re happy to have our home, and can’t wait to make it comfortable and home-like now.”
Even though the Barkers took advantage of the federal tax credit and have moved into their Naperville home, Naperville realtors say local home sales still are not where they should be.
Peggy Bolger has been a realtor in Naperville for 30 years, and is very frank when describing Naperville’s current real estate market.
“If it’s not a depression in real estate, I don’t know what a depression in real estate looks like,” said Bolger.
Bolger also notes that Naperville home buyers haven’t been able to capitalize on the expiring tax credit because the market is too high-priced.
“In Naperville, a first time homebuyer is buying a house around or under $300,000,” said Bolger, “And there aren’t that many (in Naperville) in that price range.”
That’s where the city of Naperville is trying to step in. The city is sponsoring two first-time homebuyer programs to fill the gap of the expiring federal tax credit.
The first is a result of the city’s relationship with the Illinois Housing Development Authority (IHDA). First-time buyers can apply for a mortgage credit certificate that would qualify them for a dollar-for-dollar reduction in their annual federal income taxes. Families can use the money saved—capped at $2,000 per year—for other expenses.
The second program gives 4.75% of the total money borrowed up front as a cash grant. So if you’re buying a $300,000 home and borrowing $250,000, you’d receive $11,875 to help with a down payment or closing costs. City officials hope these will help kick start all aspects of the local economy.
“It’s hard to directly track,” said Naperville Finance Director Karen DeAngelis,
“But yes, it ought to increase the business all across Naperville as we bring in new homebuyers.” Homebuyers like the Barker family, who made sure of one thing when buying their home.
“I would stress only if they could afford it though,” said Brook Barker. “That’s kind of how we’re in the housing crisis that we are, people buying more than they can afford.”
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