Newspaper article THE JOURNAL RECORD

Real Estate Industry Praises Bush Proposals

Newspaper article THE JOURNAL RECORD

Real Estate Industry Praises Bush Proposals

Article excerpt

LOS ANGELES (AP) _ Patricia McCombs, a 33-year-old deputy district attorney here, did little more than flirt recently with the idea of buying her first home. President Bush changed her mind.

She's now on an aggressive search for a condo in the Pasadena area, hunting with the same energy she devotes to prosecuting crimes in Los Angeles Superior Court.

"I'd be a fool not to," she said Wednesday.

In his State of the Union speech Tuesday night, Bush proposed letting individual buyers of first homes withdraw up to $10,000 from individual retirement accounts _ without penalty _ for a down payment. His plan also would give tax credits of up to $5,000 for a first-time home purchase.

McCombs, who will earn about $60,000 this year, is not the only enthusiast for these proposals, which require Congressional approval.

Real estate professionals from New York to California strongly praised them, saying they would give a sorely needed boost to their tattered industry.

Bush, hoping that revived real estate sales will stimulate the anemic economy, asked Congress to grant the twin incentives to first-time buyers and give additional breaks to others involved in real estate.

The National Association of Home Builders said the $5,000 tax credit, if enacted as Bush requested by March 20, would cause an additional 215,000 new homes to be built, putting 415,000 jobless Americans back to work.

"While there are no magic bullets that are sure to revive the whole economy, this is probably as close as one can get to finding that bullet,"

said Bruce Karatz, president and chief executive of Kaufman and Broad Home Corp., a big Los Angeles-based home builder.

In recession-mired 1975, first-time buyers got a $2,000 tax credit.

"What we saw was a huge increase in construction in 1976," Karatz said.

In California, single-family home building jumped 56 percent, from 89,000 homes in 1975 to 140,000 in 1976, he said.

The cheaper the housing market, the greater the potential impact.

The Ernst & Young accounting firm said that in Indianapolis, where the median priced home costs $80,800, the $5,000 tax credit would represent almost 62 percent of a 10 percent down payment, or 31 percent of a 20 percent down payment. …

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