Stimulus bill effect on East Tennessee

KNOXVILLE, Tenn. (WVLT) -- There's more impact to East Tennessee than just jobs, from the stimulus plan signed into law Tuesday by President Obama.

With around 23,000 homes for sale in and around Knoxville, many sellers hope to see more interested buyers.

If you've been considering turning that monthly rent payment into an investment into a new home, now may be the time to buy, with $8,000 that could end up in your pocket.

And with it being a buyers market, the sellers out there hope you pick their house.

With his home, in the Hardin Valley area of Knox County, on the market for almost a year, Joseph Giacobbe hopes the stimulus bill will send home buyers his way.

He says "it's the market, people are afraid right now, they want to see what the new administration is going to be doing." and "we've had a lot of people look at it, but basically I think a lot of people are just afraid to spend money right now."

Dropping his home tens of thousands of dollars several times, he hopes it sells soon, but he's not alone.

His Realtor Will Brock with Envirian Knoxville Fine Homes, has seen people face some tough times.

Will says "a lot of people may have purchased their homes a year or 2 or 3 years ago and unfortunately with home prices maybe even decreased a bit, they're forced to make a tough decision on, do I really want to sell my home for less than I bought it for, or the same amount."

Will has seen a lot more sellers turn into landlords as they resort to renting their home, but he hopes the stimulus bill giving first time home buyers an $8,000 tax credit for buying a home by
December, will turn the rental signs into sold signs.

Will says "with all the assistance coming and of course with interest rates being great right now, it really is a great time for home buyers to get out in the market and start looking."

But buying starts with lending, and some banks say they are not directly impacted by the stimulus bill.

But during the day, Joseph works to help buyers get a mortgage as a loan officer at Volunteer Mortgage and he says "I'm hoping the banks also listen and loosen up a bit, because that could be the issue at this point. Banks are just afraid because of what they've gone through in the last year or two."

With more than 20,000 homes on the market in Knoxville and surrounding areas, if you choose to buy, you've also got plenty to choose from.

Both home sellers and Realtors say they have high hopes of the stimulus plan, but expect it to be at least several months to start seeing an impact as people slowly start spending again.

Some other details of the stimulus plan include a tax credit that will put about $13 on weekly paychecks, starting around June. This is because of a tax credit which decreases the amount taken out of each paycheck. The amount will drop to nearly $8 each paycheck starting in 2010.

People who buy new cars before the end of the year can write off the sales taxes.

Homeowners who add energy efficient items to their home, such as windows, furnaces, air-conditions, can get a tax credit to cover 30% of the costs up to a total of $1,500.

College students, or their parents, are eligible for tax credits up to $2,500 to help pay tuition and related expenses in 2009 and 2010.

Those receiving unemployment benefits this year will not pay any federal income tax on the first $2,400 they receive. And that unemployment check will be $25 more, and the checks will come longer.

The $1,000 child tax credit is extended to more low-income families that don't make enough money to pay income taxes and poor families with 3 or more children will get an expanded Earned Income Tax Credit.

The plan offers $87 billion to help state administer Medicaid.

People on food stamps will get more benefits from the program.

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