Enough with tax credits. Enough with distorting the market with incentives.
Enough with artificially boosting sales now at the expense of sales later. You ever watched a car driving through a neighborhood with speed bumps? Slow down for the bumps [no credits]. Then speed up between the bumps [credits]. Slow down for the next bump [credits expire].
Enough with favoring certain buyers over others. You have 2 buyers, identical in every way. Let's say they're 28 year old females in Virginia earning $65,000. Both graduated from college 7 years ago. But one bought a condo a year after graduating. The other rented. What makes the renter any more deserving than the owner?
Enough with false titles and terminology. That first time home buyers tax credit wasn't for first time home buyers. It was for anyone who hadn't owned a home in the past 3 years. Kind of like saying calling someone a "v-rg-n" (Trulia might not allow the full word) if he or she has been celibate for the past 3 years. Oh, really? And then the definition of "first time home buyer" was expanded to folks who'd owned their homes for the past 5 years. That's like calling a couple "v-rg-ns" if they've been faithful to one another for 5 years. Look: Words matter.
Enough's enough. Don't reinstate the tax credit.
After the federal tax credit expired, in California we had a state first time home buyers tax credit from May to August. It didn't really didn't do much to help market conditions. In fact, you needed to be reminded it was in effect.
That being said, I say no to reinstating the tax credit.
I am out here in Short Sale / Foreclosure heaven. Given the current economic conditions, fewer buyers and the volume in home sales has dropped every month since Feb 2010. Add to that myself and other agents I know are starting to get Short Sale and Bank Owned listing more listings and fewer buyers equals lower prices.
I think between lower prices and Interest Rates staying relativly flat the market will correct itself. We just have to wait it out.
Read the web reference.
"As near as we can tell, the US real estate market is just waiting. It doesnâ€™t know whether to go up or down. Some areas are cheap â€“ Detroit, Las Vegas, California. And some areas have barely dropped at all â€“ such as Washington, DC, where the zombies live."
Why stimulate today's consumer for a special time period, some government funded bubble?
Values need to come down in order to establish some equilibrium with historic patterns.
"Hereâ€™s the scary thing, at least for homeowners: if this view is correct, house prices may still be overvalued by something like 30 percent. Thatâ€™s roughly the gap between average household income growth and inflation over the last generation."
Why stimulate? Lets hold the banks accountable for write downs and short sales, and the consumers responsible for foreclosures, and get it done through natural supply and demand.
The basics apply. Most of the rest is funny money.
By 2023 or so, we'll find some counterbalance, so short term stimulus in the midst of a torrential deflationary upheaval is just bad policy.
Sr Mortgage Consultant
If the real estate market needs a "boost" it probably would be best for it to take on a completely different look than the former tax credit program.
IMO, at this time the current low interest rates should be emphasized to buyers as opportunities to save....in most cases, this saving will be far greater that the tax incentive program. Thus, those that missed the boat....may just be able to reap the benefits.