Feels like the First Time, but then what? As the new homebuyer tax credit ends, real estate professionals are mixed on whether the market has bounce.

• Author: Lewis, David
• Position: [who owns] COLORADO

In March, police charged Donald Wolfe with public drunkenness when they observed him beside Route 36 in Oliver Township, Pa., giving mouth-to-mouth resuscitation to a deceased opossum.

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Little did Wolfe realize that, for our purposes, he also was starring in a roadside tableau titled, "The U.S. Government Revives the Residential Real Estate Market," with himself as the federal government and the poor possum playing the residential real estate market.

In this tableau the government tries one thing after another--the Home Affordable Modification Program, the Second Lien Modification Program, the Home Affordable Refinance Program, the Home Affordable Foreclosure Alternatives Program--but the animal just lies there.

Then the Obama Administration improves on a Bush Administration first-time homebuyers program and--a miracle!--that damn possum just gets up and walks away.

Can it happen? Can the expiring first-time homebuyer tax credit bring this moribund market back to life?

Could be. We'll soon see.

IRS figures indicate the First Time Homebuyer tax credits have been a Colorado success story. Nationally, of course, the three states ranking highest in 2008-2009 First Time Home-buyer credits were: California, $1.47 billion; Texas, $1.18 billion; and Florida, $936 million.

But Colorado held its own, tallying $247.86 million in the tax in 2008-2009. This amount was virtually equal to, ahem, New Jersey, but Jersey has 8.7 million people and Colorado just 4.9 million. Among states in the region, only Arizona's $352.4 million in First Time Homebuyer credits exceeded our numbers.

Many real estate observers and players envision a way the market could be on the glide-path out of this mess, thanks in large part to three successive first-time homebuyer tax credits offered by two successive presidencies.

Through the September 2008 Bush version, part of the Housing and Economic Recovery Act of 2008, first-time homebuyers could claim a $7,500 tax credit that had to be repaid in equal increments over 15 years.

The Obama tax credit, part of the American Recovery and Reinvestment Act of 2009, upped the credit to $8,000 and--here comes the genius part--did not require homebuyers to repay the U.S. Treasury. Rather, qualifying taxpayers who bought before Dec. 1, 2009 could claim up to $8,000 ($4,000 if married and filing separately) on either their 2008 or 2009 tax returns.

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In part three, Congress and the administration...