Whilst we hear all the talk from Congress that they understand real estate needs to lead the way for jolting the economy I wonder if tax credits and hand outs are going to do the job. we currently have historic low interest rates that should be encouraging buyers to act and not wait but we are seeing buyers just looking and taking no action to buy inventory that sellers are desperate to sell.
Also how fair are the credits, if you have recently lost a job and need to sell a home are you going to be able to buy something else or are you going to rent? So do the credits benefit the wealthier members of society and harm those that really need help?
Would a plan that revamps the mortgage mess, taking out of the mix those homes that are behind and re-arrange the mortgages with lower rates for those in trouble keeping people in their homes not be better. Is this the best use of the funds available? As Realtors we should be making sure homes are affordable, secure for those who have invested in them and not just pushing a bill that rewards those who can buy now and take advantage of the mess that the country is currently experiencing.
These are simply my thoughts that I am kicking around in my head, so weigh in and say what you think. I am always open to new ideas and am a great believer in keeping it simple.
You're right, they do keep saying real estate needs to lead the way. So why are they doing so little to stabilize it? Tax credits ain't gonna get it done if values continue to plummet. We need 2 things desparately, jobs...so folks aren't so worried about what's coming next month, and a bottom on values. Without this nothing else much matters.
Thanks for introducing the topic and it is huge. I agree wtih Chris that is is job and whatever else can be done to quell the fears of losing one, that need to take place along with everything else. I am sorry they whittled out the $15,000 tax credit for all buyers. That would have gone much further thant the present $8k tax credit for first time home buyers
Yesterday I attended a meeting at which Congressman Joe Sestak spoke on the bill. His main comments about this bill was that it is primarily a bill to save jobs. Housing will be addressed seperately, although we all know there is the first time buyers credit included in this bill. Secondly the Federal Reserve has already pumped 3.5 billion dollars into the banks and there is another 3.4 billion available to get credit moving again.
He also commented that this bill is primarily the same as the bill rejected back in October which was much less that then caused the markets to collapse. The economic models predict that unemployment might reach between 9 and 10% even with this stimulus bill and it will probably not take full effect till sometime in 2011. Without this bill the economic models predicted unemployment rates over 12% and a recovery much further out still.
So when will all this affect housing? Who knows, but we may be seeing the first glimmers of consumers regaining some confidence to buy. I have had three buyers contact me this week to start looking for homes, one said he had been waiting for the bill to be passed and the first time buyers credit to be finalised. It may start at the bottom but as people begin selling they momentum will build to larger and higher priced homes.