Investor Resistance, Appeal of Alternative Investments May Cause Tax Credit Prices to Drop

摘要

Prices for low-income housing tax credits may decline slightly as investors reluctant to pay today's prices find increasingly attractive alternative investments, according to some syndicators. "I'm not surprised that investors are curtailing investments," said Jeff Goldstein, executive vice president/chief operating officer and director of real estate for Boston Capital, a nationwide syndicator. He added that prices, which have been running over $1 per tax credit dollar in many markets, especially in California, New York, and Florida, and have gone as high as $1.28 for some projects, may have leveled off. "I still think there is a feverish pitch in buying, but things are moderating somewhat because yields have bottomed out," he said. Recently, he said he has been seeing prices for nonguaranteed 9 percent credits averaging in the low 90-cent range, with yields fqr nonguaranteed investment funds running in the mid- to high 4 percent range. Guaranteed funds, according to some industry members, are providing yields under 4 percent.