30 days and counting: Homebuyer tax credit expires

NEW YORK (CNNMoney.com) -- Attention shoppers: You have barely a month left before the homebuyer tax credit expires. But depending on where you live, you might not want to rush out to buy.

First-time homebuyers may qualify for up to $8,000, while those who are trading up could get as much as $6,500. But either way, buyers have to ink sales contracts by the end of April and close before July 1 to see the refund.

And this is absolutely, positively your last chance to claim the credit. (Probably.) So don't wait, thinking the credit will be extended for a third time.

There is little sentiment for continuing this program, especially because many consider the latest iteration's results to be disappointing. Even the Senate's biggest proponent of the homebuyer tax credit, Johnny Isakson, R-Ga., is ready to let it end.

"He has no plans to introduce legislation to extend the credit," said Isakson's spokeswoman. "Part of the benefit of the tax credit was the urgency its sun-setting generated."

That urgency was less pronounced after the latest extension, which was enacted last fall. While the first version, which just covered first-time homebuyers, netted huge sales jumps, the real estate market slumped over the winter and early spring.

That may be because some people believed that Congress would just keep adding time to the game clock, according to Nicolas Retsinas, director of Harvard's Joint Center for Housing Study. That could have kept them home by the fireside instead of out house hunting.

"The credit's influence and impact has waned considerably," said Retsinas.

"You got a lot more bang for the buck on the first go round," added Mike Larson, a real estate analyst with Weiss Research. "Most people acted on the presumption that the credit was going away."

Any house hunter considering whether to hurry a purchase to take advantage of the credit should consider where they live. There are many places where home values are projected to fall steeply over the next few months, including Los Angeles, Phoenix, Minneapolis, Washington, D.C., and most of Florida.

Take someone shopping for a typical single-family home in the Miami metropolitan area. The median price there is about $215,000 and a qualified first-time homebuyer would pay about $207,000 after the credit is factored in.

But prices in Miami are likely to fall 22.5% this year, according to projections by Fiserv and Moody's Economy.com. So by waiting a few months you could nail a $48,000 price cut -- a much better deal than the tax credit..

On the other hand, some cities are expected to post record price gains this year, including Eugene, Ore.; Napa, Calif.; Charleston, S.C.; and Cheyenne, Wyo. Buyers in those markets would receive a double benefit by making their purchases happen this month.

Of course, there's no guarantee that the forecasts will be accurate, but they're certainly something consumers should consider.

Not every buyer qualifies for the credit. Here are some guidelines:

• Homebuyers who have not owned a home for the past three years may earn up to $8,000 or 10% of the purchase price, whichever is lower.
• Buyers who have owned a home for five consecutive years of the past eight qualify for up to $6,500 in credits.
• There are income limits of $125,000 for single taxpayers and $225,000 for couples.
• Anyone paying more than $800,000 for the home cannot claim the credit.

There's a prohibition on claiming the first-time homebuyer credit if either member of a couple owned a home within the three-year period. They can claim the existing homebuyer credit.

Homebuyers who are under 18 or are listed as dependents on the tax returns of others don't qualify. The home must be kept at least three years.

The credit may be claimed on 2009 taxes, even if the return was already filed. Just submit an amended return.

Note that buyers get the full amount of the credit they're due even if that exceeds the amount of taxes they owe. If you're a first-time buyer and your total tax bill for the year is $6,000, you get all that back plus another $2,000.