"Just when I thought the housing market was finally being left to correct on its own, I'm starting to hear talk regarding yet another home buyer tax credit. From HUD to the hedge funds, it sounds as if it is gaining 
steam yet again. This one could involve not just first time/move-up buyers, but a credit for buyers purchasing foreclosed properties or short sales (when the bank allows you to buy a home for less than the value of the outstanding mortgage). HUD Secretary Shaun Donovan, appearing on CNN's State of the Union this weekend, didn't rule out another tax credit. He did say it's 'too early to say,' but then added that 'we're going to be focused like a laser on where the housing market is moving going forward, and we are going to go everywhere we can to make sure this market stabilizes and recovers.' After that several Congressional candidates in Florida threw their voices behind the possibility, and Florida Gov. Charlie Crist then chimed in on the same show, saying that another tax credit, 'would stimulate the economy. It would increase home sales in Florida.' He finished with: 'I would absolutely encourage the president to support that because it would certainly help my fellow Floridians."
"So of course then I went the official route and followed up with a HUD spokesperson who responded: 'No news here...there are no discussions underway to revive the credit.' Is it all political? And is another tax credit the answer? 'I don't think it's all politic
al,' says housing consultant Howard Glaser. 'I think they are panicked that the economy/housing got away from them.' Glaser doesn't sound convinced the tax credit is really on the table. 'They can do a lot off budget with the GSE's and FHA with no Congress.' I know a lot of you out there would argue that a housing market correction, as painful as it is, is necessary for housing to truly find its footing again and recover for the long term. Another artificial stimulus could just prolong the agony and set us up for the same drop off in sales and prices that we're seeing right now. But it could also move some inventory quickly." "With inventories of new and existing homes dangerously high, and the shadow supply of foreclosures pushing that volume even higher, more stimulus could be a necessary evil.
I liken it to
what I'm doing with my lawn this week. All summer I fought the weeds, pulling them, using the organic sprays and repellents, spreading mulch to deprive them of any air. And then I gave up. I called the lawn service and told them to bring every chemical in their arsenal. Shock the overgrown mess into submission once and for all, so that I can start fresh again and reseed this fall."
**********************************************************
Matt's Commentary: Oh, someone please tell me it's all a bad dream! They're not really considering another tax credit, are they? They say that the definition of "insanity" is doing the same things over and over and expecting different results. Well, if that's the case, it's time for someone to put a straight jacket on the whole city of Washington D.C.
If some government intrusion doesn't work, then the answer has to me MORE government intrusion, right? WRONG!!! Can they please just let the markets correct themselves, regardless of how long it takes, so we know where we stand? With the November Mid-terms lurking around the corner, these rumblings about another credit absolutely reaks of politics, but we have to learn lessons from the past. This is especially true when the "past" was just a few months ago.
The homebuyer tax credit did nothing to stabilize the housing market or to remove excess foreclosure inventory from the market. All it did was take sales that would have occurred in the 3rd and 4th quarter of the year and moved them up to the 1st and beginning of the 2nd quarter. That truth manifested itself when pending home sales fell 30% in May, and existing homes sales had a similar drop of historical proportions in July.
Republicans and Democrats alike, please listen loud and clear; just stay out of our business! I've never seen more of a reverse-Midas-touch than that which exists with the federal government, and it's time that they just GET OUT OF THE WAY. Don't turn the American Dream into a nightmare with your constant meddling. Keep taxes low, keep motivation high, and let this great country do what it always has....SUCCEED.
steam yet again. This one could involve not just first time/move-up buyers, but a credit for buyers purchasing foreclosed properties or short sales (when the bank allows you to buy a home for less than the value of the outstanding mortgage). HUD Secretary Shaun Donovan, appearing on CNN's State of the Union this weekend, didn't rule out another tax credit. He did say it's 'too early to say,' but then added that 'we're going to be focused like a laser on where the housing market is moving going forward, and we are going to go everywhere we can to make sure this market stabilizes and recovers.' After that several Congressional candidates in Florida threw their voices behind the possibility, and Florida Gov. Charlie Crist then chimed in on the same show, saying that another tax credit, 'would stimulate the economy. It would increase home sales in Florida.' He finished with: 'I would absolutely encourage the president to support that because it would certainly help my fellow Floridians.""So of course then I went the official route and followed up with a HUD spokesperson who responded: 'No news here...there are no discussions underway to revive the credit.' Is it all political? And is another tax credit the answer? 'I don't think it's all politic
al,' says housing consultant Howard Glaser. 'I think they are panicked that the economy/housing got away from them.' Glaser doesn't sound convinced the tax credit is really on the table. 'They can do a lot off budget with the GSE's and FHA with no Congress.' I know a lot of you out there would argue that a housing market correction, as painful as it is, is necessary for housing to truly find its footing again and recover for the long term. Another artificial stimulus could just prolong the agony and set us up for the same drop off in sales and prices that we're seeing right now. But it could also move some inventory quickly." "With inventories of new and existing homes dangerously high, and the shadow supply of foreclosures pushing that volume even higher, more stimulus could be a necessary evil.I liken it to
what I'm doing with my lawn this week. All summer I fought the weeds, pulling them, using the organic sprays and repellents, spreading mulch to deprive them of any air. And then I gave up. I called the lawn service and told them to bring every chemical in their arsenal. Shock the overgrown mess into submission once and for all, so that I can start fresh again and reseed this fall."**********************************************************
Matt's Commentary: Oh, someone please tell me it's all a bad dream! They're not really considering another tax credit, are they? They say that the definition of "insanity" is doing the same things over and over and expecting different results. Well, if that's the case, it's time for someone to put a straight jacket on the whole city of Washington D.C.
If some government intrusion doesn't work, then the answer has to me MORE government intrusion, right? WRONG!!! Can they please just let the markets correct themselves, regardless of how long it takes, so we know where we stand? With the November Mid-terms lurking around the corner, these rumblings about another credit absolutely reaks of politics, but we have to learn lessons from the past. This is especially true when the "past" was just a few months ago.
The homebuyer tax credit did nothing to stabilize the housing market or to remove excess foreclosure inventory from the market. All it did was take sales that would have occurred in the 3rd and 4th quarter of the year and moved them up to the 1st and beginning of the 2nd quarter. That truth manifested itself when pending home sales fell 30% in May, and existing homes sales had a similar drop of historical proportions in July.
Republicans and Democrats alike, please listen loud and clear; just stay out of our business! I've never seen more of a reverse-Midas-touch than that which exists with the federal government, and it's time that they just GET OUT OF THE WAY. Don't turn the American Dream into a nightmare with your constant meddling. Keep taxes low, keep motivation high, and let this great country do what it always has....SUCCEED.
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