CHAMPAIGN – The president of the Coldwell Banker Real Estate chain is pressing for the first-time home buyer credit to be extended and greatly expanded.

But Jim Gillespie said he doesn't know how successful the proposal will be because it could push up the federal deficit.

Gillespie, a 1967 University of Illinois graduate, returned to Champaign-Urbana on Friday to receive a Distinguished Alumni Award from the College of Applied Sciences.

In an interview, Gillespie said he would like to see the home buyer credit – available on homes purchased between Jan. 1 and Nov. 30 of this year – to be made available for another full year.

And he wants it expanded to include all home buyers, not just first-time buyers.

The credit is 10 percent of a home's purchase price, up to a maximum credit of $8,000. But Gillespie wants the maximum credit increased to $15,000, and to be made available to any buyer regardless of income.

Currently, only single taxpayers with incomes up to $75,000 and married couples with incomes up to $150,000 can claim the full credit.

Gillespie said he met Oct. 2 with Senate Majority Leader Harry Reid, D-Nev., whose state has been devastated by the real estate downturn. Reid told Gillespie he supports a six-month extension of the credit, and President Barack Obama voiced support for it this week.

But the price tag could get in the way of an expanded credit being approved.

Gillespie said the current tax credit costs the federal government roughly $1 billion a month. For the 11 months the credit is scheduled to be in effect, the tab is expected to come to $15 billion.

Expanding the credit to more people and extending it another year would cost an estimated $35 billion, he said.

But Gillespie contends the resulting real estate sales would spur economic activity and "help Main Street and not Wall Street."

Using economic impact figures from the National Association of Realtors, Gillespie claimed the sale of additional homes would pump $33 billion into local economies, and some of that would come back to the government through taxes.

When Gillespie visited Champaign-Urbana in 2005, he noted that since 1950, "there's never been a year where (housing) prices have gone down."

But on Friday, he observed that housing prices declined in 2007 and 2008 and are down this year too.

National price drops of 15 percent to 18 percent are skewed by the large number of distressed properties sold this year, he said.

In Las Vegas, 75 percent to 80 percent of the properties sold this year were distressed, and high percentages have also been reported in Florida, California, Arizona and Michigan.

Even though housing prices are down nationally, "unit sales are up," Gillespie said. But buyers this year don't fit the traditional pattern.

Thirty percent to 40 percent of the homes sold this year were to first-time buyers, and another 30 percent to 40 percent were sold to investment buyers, Gillespie said.

Meanwhile, a traditionally reliable component of the market – the "move-up buyer" – has been underrepresented.

"Real estate is not a sustainably strong market because the move-up buyer is not in the market," he said.

Gillespie said some local real estate markets have rebounded nicely – namely those with good job growth, a strong military presence or an energy-based economy.

Shreveport, La., Columbus, Ga., and the state of Texas are examples of those, and North and South Dakota have also been resilient, he said.

After graduating from the UI, Gillespie became a grade school teacher and coach in Ludlow. He later taught at a boys' school in Memphis, Tenn., and was director of a YMCA in LaGrange.

Gillespie entered the real estate business more than 30 years ago on the advice of a friend and has been Coldwell Banker's president and chief executive officer since 2004.