Are the Home Buyer Tax Credits Working?

In an effort to increase demand for housing, the federal government recently enacted a tax credit of as much as $8,000 for first time home buyers. On top of that, the state of California is now offering a similar credit worth as much as $10,000 for those who buy newly constructed homes.

[Check out New Home Buyer Tax Credit: 7 Things You Need to Know]

So what impact have these incentives had on the housing market so far? In a post Wednesday, Lansner on Real Estate offered some interesting anecdotal evidence suggesting that the tax credits may have led to an uptick in sales--at least for one California home builder:

Newport Beach-based William Lyon Homes says new federal and state tax credits may be responsible for a “phenomenal 39 new home sales in just three weeks” at its developments in Orange County and elsewhere in Southern California.

Said SoCal Division President Brian Doyle:

“When the tax credits were authorized, we began to see interest among those individuals who needed to have their confidence restored in order to return back to the housing markets where they have been absent from for so long. In the past three weeks, we have experienced sustained momentum at our sales offices telling us that Southern Californians are feeling more comfortable and that the tax credits make a big difference in how they perceive real estate today.”