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Soon after HUD Secretary Shaun Donovan  dropped the hint, in a CNN interview, that there might  be another home buyer tax credit on the horizon,  the Calculated Risk Blog posted the thoughts of economist Tom Lawler, that rumors of of another credit would hurt the struggling real estate market by causing buyers to hesitate, or even stop working toward their purchase, in anticipation of the new credit taking effect.

Calculated Risk also reported that a HUD spokesman, when asked if a new home buyer tax credit might be in the works responded, “No news here…there are no discussions underway to revive the credit.”

I hope we don’t see another tax credit and that we don’t even hear any more rumors about one, and here’s why:

1.  Without the previous tax credits, the real estate market would have corrected by now.  As the market stands now, able buyers are waiting for the market to hit bottom, and there is a lot of conjecture that better deals are yet to come.    The credits prolonged the inevitable market rock  bottom in prices.  We won’t be able to call the bottom, only report on the recovery.

2.  Phoenix Real Estate Blogger, Jay Thompson, is 100% correct that the prospect of receiving an$8,000 tax credit is a pretty poor reason for buying a house.  Making the biggest purchase most people will in their lives should be based on a lot more complex reasons and financial considerations than collecting a few  thousand bucks for doing the deal.

3.  If the government is intent on spending money to to stimulate the housing market,  why not spend some of it helping communities fix up blighted properties, HUD foreclosures, and neglected properties to make them eligible for mortgages?  Bolster local initiatives to help people (owner-occupants) purchase in not so desirable areas?  Sponsor community gardens?  Help homeowners keep their homes?  Ah, but not of that really puts much money in the real estate agent’s pocket; nor does any hint of government intervention in distressed properties and neighborhoods please real estate investors.

Home values in certain segments of this area are significantly eroded by rental properties nearby, yet Memphis continues to be touted as a great town for investors.  Home ownership is still a big part of the American Dream.  Owners take pride in their property and in their community.  Renters have little investment other than their security deposit.  Let’s use some of those Federal bucks to build some community pride.  That’s the key to improving the housing market – and keeping our communities strong!

Related articles

• Real Estate Weekly: Home-buyer tax credit not likely to make an encore (marketwatch.com)
• HUD Secretary: Who’s up for another homebuyer tax credit? (hotair.com)
• Will the Homebuyer Tax Credit Return? Should it? (phoenixrealestateguy.com)

Joe Spake is a Memphis, Tennessee based Consultant, Real Estate Broker, and Blogger. Call 901.214.5563 for a consultation or click to make a social connection.
If you enjoy this blog, please subscribe to the RSS Feed. 

If you use Google+, I have just started a brand new business page. Visit it HERE.

The $8000 Federal Tax Credit for first-time buyers ($6500 for non-first-timers) expired last night at midnight.

If you were truly in a position to buy a home, and didn’t make your move, you missed your chance to pick up some easy money.  If you were a motivated, ready, willing and able buyer and took advantage of the credit, congratulations on a smart move.

If you weren’t really ready to buy a home, either mentally or fiscally, but were pressured into a purchase with the tax credit used as leverage, good luck!

If you weren’t ready to buy and didn’t because this whole rush for the bucks just didn’t feel right to you, no need to feel guilty; you probably avoided a big mistake.

While the 2 rounds of the tax credit may have (artificially) stimulated the housing market for a while, the program kept the market from finding its real bottom.  I am not an economist, but I think real recovery is market based, andartificial Federal props, like the tax credit, have actually delayed recovery by generating skewed sales information.

Now I can finally remove those count-down widgets from this blog and my website.

It’s not over yet, but you MUST be under contract by April 30, 2010 (with closing by June 30)  to be eligible for the (up to) $8000 tax credit for first time home buyers or (up to) $6500 credit for buyers who have owned before.

So if you are are a buyer and you typically wait until the last minute, you better think real hard about putting your deal together.

If you are in Memphis and need the help of an agent, contact me.

Far be it from me to ever be an annoying sales person type, but I kind of feel like Billy Mays as I write this post.

SPECIAL OFFER!  ACT NOW!!  THIS OFFER WON’T LAST!..

This is the last time I am going to mention the $8000 Federal Tax Credit for first-time home buyers ($6500 if you have owned a home before).  The offer ends April 30, 2010 – you have to find a home and get it under contract by that date to qualify for the credit.  Certain restrictions apply. Consult your real estate professional.  If you qualify, you have a little more than a month to find a property and get it under contract.

The Feds have already let it be known that  THIS OFFER WILL NOT BE REPEATED.

Finally I will be able to remove that annoying countdown clock widget from my sidebar.

Joe Spake is a Memphis, Tennessee based Consultant, Real Estate Broker, and Blogger. Call 901.214.5563 for a consultation or click to make a social connection.
If you enjoy this blog, please subscribe to the RSS Feed. 

If you use Google+, I have just started a brand new business page. Visit it HERE.

As a follow-up to yesterday’s post, and for those who like charts and graphs, here is the National Association of Realtors’ summary chart of the newly extended and expanded Home Buyer Tax Credit.

Download a high-res copy here

Joe Spake is a Memphis, Tennessee based Consultant, Real Estate Broker, and Blogger. Call 901.214.5563 for a consultation or click to make a social connection.
If you enjoy this blog, please subscribe to the RSS Feed. 

If you use Google+, I have just started a brand new business page. Visit it HERE.