California is beginning to bounce back from the burst of the real estate bubble. New home starts are rising in much of California. Lawmakers have created a number of initiatives in an effort to boost the industry.
The new home buyer tax credit is one such initiative designed to stimulate both the real estate market and employment numbers. Consumer confidence is returning, and 2011 is shaping up to be the best year yet for buying a new home in San Diego, CA.
Those considering the purchase of a property in San Diego have a number of great reasons for buying or building a new house. Some of the benefits of buying a new or first house are timeless. Others, like the 2011 first-time and new home buyer tax credit, are persuasive enough to give buyers incentive for not putting off their purchase. In fact, the four best benefits are:
1) The tax perk: California lawmakers passed an initiative in 2009 to stimulate the sagging local economy. The initiative allowed new homebuyers in California to apply for a tax credit on the purchase.
The program was so well received in 2009 that it was extended into 2010. The benefits of this credit carry over into the 2011 tax year pursuant to an enforceable contract executed on or before Dec. 31, 2010. The new homebuyer tax credit must be applied for in advance of construction.
This new home buyer tax credit has been expanded to include first-time buyers in general. The new home buyer tax credit has expanded every year in the amount of credit being granted.
Two hundred million dollars in credits are available statewide to buyers in these categories between December 31, 2010 and the end of August 2011.
Government officials urge potential purchasers to get in on the deal early. Funds from previous years depleted very quickly, leaving some late applicants out in the cold. It may be too late at this stage in the game to qualify, but if buyers meet the December 31, 2010 deadline, it is worth checking into further.
Additionally, active members of the Armed Forces and certain federal employees who currently work outside of the US may be eligible to apply for the Federal Homebuyer Tax Credit. This is an extension of the 2010 program. They face deadlines of April 30, 2011 to make a sales contract with closing to be completed by June 30, 2011.
There doesn’t appear to be any new tax credits on the horizon. Do your research if you think you might benefit from these programs. The answer is always “no,” if you don’t ask.
2) The ability to take advantage of “greener” technologies: Modern houses can be built with just about any technology, and those technologies can be integrated from the ground up. This includes things like geothermal heating, built-in smoke and carbon dioxide detectors, closed circuit camera systems and others.
Not only are these systems virtually unheard of in older houses, they are extremely costly to install after-market. In many cases, it is simply too cost-prohibitive to retrofit an older home with some of these technologies.
Working them in from the planning stages is more efficient and less expensive. Plus, “green” systems are cheaper to run and maintain on a month to month basis.
3) The ability to customize your own home: Building new allows the owner to customize anything and everything. This applies to more than just paint colors and carpet styles.
Counter heights can be adjusted. Rooms can be made wheelchair-accessible. Walls can be built entirely out of recycled or recyclable materials. Virtually anything an owner can dream up can be incorporated into a new home.
Even dwellings built and sold by developers can be customized to a certain degree. Once upon a time developers built only “cookie cutter” houses. Buyers were expected to purchase them “as is” and make changes after the fact.
Many of today’s developers, however, recognize the value of customer input. Some allow buyers to be more involved in the design and decor process. This option appeals to people who aren’t prepared for the task of building an entire house from scratch, but still want a degree of creative control.
4) The ability to keep more of your own money: Even modest modern houses without the “bells and whistles” of a luxury home retain their value longer than comparable older ones. This is because today’s California houses are simply built better.
They are more energy-efficient, are sealed more tightly, have better envelopes against weather, and use higher-quality building materials. A house built in 2011 will generally be in better shape after a decade than its 1990 equivalent was after ten years. Plus, homes with energy-efficiency systems cost less to use and maintain on a month to month basis.
2011 may be the year to build your dream house. Your dream house may be one with the most up-to-date technology, or simply the first house you’ve ever been able to call your own. It may even be somewhere in between. No matter what your dream, 2011 is a better year than ever before for buying a new home in San Diego.
Let Shea Real Estate & Investment Group help find your new home in San Diego. For investors, Shea also offers many real estate development opportunities.
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