To extend or not to extend the first time homebuyers’ tax credit, that is the debate facing Congress right now.

Some say that the $8,000 tax credit is boosting the real estate market, an enormously important part of our economy, whereas others say that it doesn’t bring many more new buyers into the market than would have been there already and that the price tag is just too high.

First of all, let’s think about why home values have dropped over the past couple of years. Well, the primary factor would be an oversupply of housing. Too much inventory creates a vicious circle whereby values decline and potential home buyers, not wanting to buy into a falling market, sit on the sidelines and wait for a perceived bottom. This lack of demand then causes values to fall even further.

And, buyers continue to wait.

So to address this, congress created the tax credit for new homebuyers. Across the country, we’ve seen pending and existing home sales turn a corner and rise month over month, with figures much higher than a year ago — this is a much faster turnaround than was expected.

It’s undeniable to say that the tax credit has been popular. The number of first time buyers jumped 25 percent this year and now make up nearly half of all home sales. In fact, over 350,000 new home sales this year so far could be directly attributed to the tax credit, but it’s only recently that we’ve started to see the playing field level out.

The argument for extending the credit could be that allowing it to expire might put the recent signs of the recovery that we’re beginning to see in the housing market in jeopardy, with a rush of borrowers overwhelming lenders and settlement service vendors by trying to close before 11.59 p.m., Nov. 30. In addition, extending the credit could spur 383,000 additional home sales, including 80,000 housing starts, which would create nearly 350,000 jobs.

We’re starting to see good signs in the housing market, but the market could still be considered fragile. The worry is that allowing the home buyer tax credit to expire could put that recovery at risk, bringing it down like a house of cards.

James Tibbetts is an associate broker at West Seattle Windermere and can be reached at 206-932-2550.

Full disclosure; James Tibbetts is an advertiser with the West Seattle Herald.