The NAR, NAHB, and now the AGC, are requesting the $8,000 tax credit be extended. They feel that it produces sales and leads to increased home construction. Not so fast.
Tax credits are fine. Love 'em, just not this way. Put them in the 1040 like a dependency deduction. If you bought a home last year - any home at any price - put down the allowed deduction or credit. No down payment assistance, to monetized programs, just an incentive for buying.
The credit as it is applied now is not so much the carrot (as SarahGray Lamm put it) but a cherry - a reward after the fact.
As for construction, this argument doen't track. Not until the inventories are depleted will new construction be viable - and only then if it meets the size, location, and pricing requirements of the market. The tax credit in itself does nothing to promote new construction. If the credit was only allowed for new construction, the inventories would shrink faster, but not necessarily in the right ways to promote new construction.
For new construction to be viable, there has to be sufficient demand and a willingness to spend as well as affordability.
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Honestly, I am not seeing it really affect my biz as much as I thought it would.
Steve,
Good points. I think the government ought to get out of playing in the credit, housing and RE markets altogether.
I say that as a licensed broker and a builder in Texas. We'd be better off with slow and grow than the whip-saw markets we get when government "help" goes off track.
Same for health-care, education, . . . sorry, I got carried away.
Courtney,
There are so many factors that go into someone's desire to search for and acquire a home. I'm not surprised. :)
Steve
Mike,
Keep going. I'm with you. Government pull-back. Absolutely! :)
Steve
We are borrowing tomorrow's business for today, in the instances where it serves as a carrot.
When it is a cherry, we are giving away revenues needlessly.
Mike,
The market manipulation is what I have the most issue with. If we have money to give back, the government must be collectively too much. :)
Steve
Steve,
Call it for what it is. Mike Jaquish alluded to it, but it's more sinister in its implications.
The Feds are STEALING from our grandchildren so we don't have to deal with it today.
The worst of work-ethics, put it off for today. Or, as is the case with American attitudes towards borrowing, lets borrow from our future. We're spending it all now, there will not be a very good future if this continues.
All I know is that Texas RE values will spike when we declare independence!
Good thing I'm in home building and RE. : )
Mike,
Texas might be in the best position of all right now because of that independence issue. :)
Steve
Steve, they could extend the credit - as a credit like you illustrated and there would be no advance money out of anyone's pocket except the buyers. What a concept - you ought to run for office!
Frank and Sharon.
Thanks. but I'm sure that I am unelectable. :)
Steve