Harford house-hunting couple, others heartened by Bush tax-credit proposal

February 15, 1992|By Ellen James Martin | Ellen James Martin,Staff Writer

Lisa and Richard Frickel began searching Harford County this week for a first home with a fireplace, a master bedroom with private bath and a romantic setting. Now, President Bush has persuaded the young couple to accelerate their search.

"We're getting very pumped up about the idea of having a nest," Mrs. Frickel says. Her eyes twinkle when she talks about Mr. Bush's proposal for a tax credit of up to $5,000 over two years. It would go to first-time homebuyers as part of the president's economic stimulus program.

The tax credit proposal is one more factor stimulating the new-home market in Maryland, which has picked up strongly in recent weeks, local builders report. They say low mortgage rates, moderate home prices and builder incentives have been other factors encouraging couples like the Frickels to step up their home-buying plans.

"The people who have been holding back are coming out now," says Robert J. Kappus, president of Brockton Homes, a small firm specializing in entry-level homes in the Edgewood area.

This week the Frickels visited the Brockton Homes model and were impressed.

"We're definitely going to buy something within six months," says Mrs. Frickel, 35, an artist at Martin Marietta Corp.'s Middle River complex. She and her husband, a 28-year-old furniture warehouse supervisor, are tired of the limitations imposed by renting an apartment and believe the time to buy is now.

Builders and realty specialists say prospective buyers don't take passage of the tax credit for granted -- it must still pass Congress and there already are signs of trouble.

Further, they say job fears and other worries about the economy continue to make some first-time buyers hesitant. Still, the industry specialists say buyers are enthusiastic about the tax credit concept and consider it a strong incentive to many to start house-hunting.

"This tax credit is a powerful thing. This is the one that's going to get the fence-sitters off the fence," says Robert W. McGee, president of Bel Air-based Keystone Homes, a builder selling town houses and detached homes in four Harford County communities, including the new town of Riverside which PresidentBush visited yesterday.

Since last month when Mr. Bush unveiled the tax credit proposal in his State of the Union address, Mr. McGee says traffic through his sales centers has increased 50 percent and sales are up 25 percent.

In Mr. McGee's view, the last drop in the Federal Reserve's discount rate, which came in December, was a major factor spurring interest among first-time buyers. Now many buyers are also intrigued by the prospect of the tax credit, he says, "though they're only vaguely aware of the particulars."

The tax credit would be available to first-time buyers who purchase a property after Feb. 1, 1992, Donald Leavens, director of tax research for the National Association of Realtors, explains. The buyer must have the property under sales contract by Dec. 31, 1992, but would have until June 30, 1993, to actually close the deal.

"It's certainly one of the most popular and sexy items President Bush has proposed," says Mr. Leavens, who reports getting a large number of calls on the proposal from realty specialists throughout the country seeking to answer customers' questions.

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