I like to say I'm in the business of helping business. Earlier in my career I sold radio advertising and helped companies market their products. Now I manage the Salt Lake market for the Bonneville Radio Group, which includes popular radio stations like KSL, FM100 and Arrow 103.5. This business and broadcast experience has taught me how important it is during challenging economic times to lift ourselves by lifting others. This principle became clearer to me in recent weeks as I thought about the slowdown in Utah's economy and the president's signing of the Housing and Economic Recovery Act of 2008.
Part of lifting ourselves and others is focusing on the positives. The Bonneville Radio Group is currently running radio spots in the Salt Lake market area that highlight what is right with Utah. We are fortunate to be doing business in a state that consistently out-performs the nation. Our unemployment rate is among the lowest in the nation, unlike many states, we are still creating jobs, and Utah recently received a third-place ranking for the top state for business. Even in challenging economic times, I'm bullish on the Utah economy.
And the prospects for an economic recovery just got brighter.
Experts agree that the current drag on the Utah economy is residential construction, which shed 11,000 jobs in the past year. The public has suffered because of some poor decisions made by some lending institutions and speculators. But first-time homebuyers had nothing to do with these decisions, and we now have the opportunity to stimulate our economy by making it easier for them to realize their American dream. Here is how it works:
Qualifying first-time homebuyers will receive a $7,500 tax credit for the purchase of their first home. This is fantastic news for Utah's economy as a whole. Immediate benefit comes to first-time homebuyers as many have been renting for several years and are finally ready to purchase. First-time buyers are often scared away by the news of trouble in the housing market.
The truth is this is a great time to buy. Interest rates are in the 6 percent range, there are ample homes for sale and, thanks to the available tax credit, they are now ready to buy knowing there is a sizeable tax credit available to replenish their savings when they file their 2008 taxes.
Significant benefit also comes to those who don't qualify as first-time buyers but will eventually see the positive effects from the financial windfall.
This change in the law is good news for sellers as well. How helpless one must feel watching the weeks roll by with a "For Sale" sign in the front yard. As an infusion of first-time homebuyers enters the market, the probability of selling a home greatly increases. As existing homeowners sell their homes, they almost always purchase again.
Other industries also reap the benefits of the new legislation. Companies that sell furniture, home-improvement goods, banks, title companies, realtors and others will see increased sales. As consumers increase purchases, tax revenue grows to benefit the entire community by adding public projects or lowering tax rates.
Here's the catch: The window of opportunity is short for first-time homebuyers. To qualify for the credit, they must occupy their new homes before July 1, 2009. The sooner we educate and encourage our family members, friends, and neighbors to take advantage of this new tax credit, the more Utah families will benefit.Let's not hesitate to lift ourselves by lifting others and take advantage of this opportunity to grow the Utah economy.
Chris Redgrave is chairwoman of the Salt Lake Chamber Board of Governors.