Tax Credit Update

Who would have thought twenty years ago that tax credits would be at the boiling point? What impact, if any is this having on NJ? We encourage you to review the earticle and let us know your opinion in our comments section.

Tax Credit Update

Therese Fitzgerald
Multi-Housing News
October 14, 2006

The buzz in the low income housing tax credit business is prices being paid for credits — near, and in some places, over $1 — could be reaching a boiling point. “We have certainly hit the peak,” said Andrew Weil, a managing director at tax credit syndicator CharterMac Capital L.L.C. “and have started to see a turnaround. How high that turnaround goes is the open question.”

Pricing, of course, will always be a function of supply and demand, and investor demand in the 20-year-old Low Income Housing Tax Credit program has historically exceeded supply. But demand is also impacted by interest rates and the availability of alternative investments, both of which are currently on the rise. Industry hawks say prices, which are averaging roughly 98 cents nationally, could pull back an average of four cents.

“Demand is still good,” said Weil. “But, while there is demand, we are concerned about the second part of the year at current yield levels. Investors are definitely still interested. It is just a question of at what price.” 

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