The Virginian-Pilot
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An $8,000 tax credit for first-time home buyers will do little to stimulate the local housing market, said real estate industry executives in Hampton Roads.
The credit, signed into law Tuesday as part of the federal economic recovery package, allows first-time home buyers to receive the credit on their 2008 or 2009 income taxes. The real estate industry had lobbied for a $15,000 credit open to all home buyers.
"It is a nice reward for a first-time home buyer, but I don't think it's going to create in them a sense of urgency," said Dick Thurmond, president of William E. Wood and Associates. "They've already tried this, and it had little impact."
Government officials last year offered a $7,500 interest-free loan to first-time home buyers as part of a stimulus package.
Opening up the new tax break to all home buyers and allowing them to apply the money to down payments would have had more impact, Thurmond said.
Terry Gearhart, vice president of sales and marketing for Terry Peterson Residential Companies of Virginia Beach, also saw little impact from last year's credit.
Still, he said, not having to pay back the new credit could be more attractive.
"If the government is giving you $8,000, that's still something to me," Gearhart said.
Josh Brown, (757) 446-2318, josh.brown@pilotonline.com
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Its a start...
In this article, Mr. Thurmond is supporting the $8,000 tax credit but believes more could be done to decrease the amount of inventory in the market. Instead of focusing on negative issues which create fear, there are some positive ones here. When I entered real estate, interests rates were at 9.5% and now they are near 5%. Just two years ago, there was no inventory and now there is plenty. It was a sellers market then but now it is a buyer's market. We all should be thinking of ways to reduce the inventory which is good for all homeowner's because it will stabalize prices. FHA loans are still available with 3.5% down payment with average credit scores. VA loans are still guaranteed by the government. Many sellers are willing to pay some closing costs which was few and far between just 2 years ago. So its not all bad.
continued
will still be looking at empty check out lines.
Same song, same dance. Republicans only look out for fat cats and democrates only look out for those too irresponsible to look out for themselves.
More stupidity from Washington
Why is it that only the irresponsible are benefitting from these bailouts? The first time buyer does not have the credit to obtain a loan (under most current banking terms) and the $8,000 does not substitute for a down payment of 20% on the average $225,000 house. It appears the government is again encouraging reckless behavior from people who can not qualify for or afford a mortgage in the first place.
If our new President had really wanted to help the middle class (judging by the Spendulous plan this was never the intent, $8.00 an hour road crew jobs does not a middle class make) they would have made any bank accepting Taxpayer (not government – government does not earn money – citizens do) money offer a 2% interest rate and no closing cost to every mortgage holder in good standing. This reduction would put money into the hands of folks that are more likely to spend above the level of sustenance.
Having an additional $13.00 in the ole paycheck will only increase spending at gas stations and grocery stores. I am delighted that those who still have jobs will still be able to get work and maybe buy a couple extra boxes of Mac & Cheese; but, the consumer retailers will
Irrelevent
I'm quite aware how to look at a real estate price tend graph. A good price is a good price no matter what else is happening at the same time. People that get make decisions based on hype rather than the hard numbers in front of them doom themselves to poverty.
Time to buy!
Let's look at this long term. Home prices are down 20+%, there is huge supply, mortgage rates are at or below 5% AND the government is giving an $8,000 tax credit for 1st time homebuyers. Even if this is not the bottom for prices, factor in the other positives and BUY! If your home depreciates another 10% after your purchase before housing starts to recover, over time you're still ahead with a 5% mortgage, tax deductible mortgage interest and an $8,000 tax credit vs continuing to throw money away in rent payments.
Clawbacks
and the government will remand the credit over 7 to 15 years to Treasury, correct? The Dow is likely headed toward 5900, some running to gold may fall down an elevator shaft with forex and metals as capital preservation if they don't have the market experience of a Dennis Gartner, and there will be nine to twelve million more foreclosures by 2013 when the next refinery shortage is forecast to occur. Get out of debt and save! This goes for all those desperate folks in the wealthy neighborhoods too, I can hear you. I agree with the last post, take the 2001 price add 2-3% annually for townhouses based on crime, 6% for bay amd oceanside highrises, 8% for single family homes, and 12% for homes with bulkheaded waterfront and deepwater access. In this unique market, the buyer can make any offer, but the seller chooses to cash the check. Shopping for a dream home or a desperate seller? Hmmm...
evanj - the long term price
evanj - the long term price trend data says to take the 2001 price and compound 3% yoy increases to it. That's what you should pay today. That is quite a bit lower than the wishing prices. Information source is Robert Shiller's graph (google it) from Irrational Exuberance, 2nd print. There is still tons of foreclosures to go. The govts silly 8K tax stuff is nothing. 2001 prices, then we'll talk (and that would be a huge decision, who wants to be anchored to 757). This was originally to be 15K, and even then it wouldn't matter. I guess you could get a house, then immediately quit paying then immediately demand a workout for added savings. But I wouldn't buy a house now! I look a little, and all I see is overpriced garbage.
Go ahead and buy
If you can find a good price go ahead and buy. You can check the long term trend data to figure out about where the price should be. People that cower in fear every time the financial news is negative will always miss the good deals. It's when things are overly positive that you have to watch out.
Mr. Gearhart said:
"If the government is giving you $8,000, that's still something to me." I wish we could get away from this concept of the government as benefactor. The government is giving us NOTHING. All they are doing is picking our pockets (taxes) and redistributing our wealth to people who think it's silly to save for things they want, or to live within their means. Worse, they are giving our money to banks, investment houses, credit card companies, insurance firms, automobile manufacturers, and other business segments, who have fallen on hard times because of their own past deficient or even fraudulent business practices.
Whether it's $8,000 or $15,000.....most people who are worried about losing their jobs, their investments and are possibly two paychecks away from bankruptcy, won't be taken in by this latest snake oil salesman, George Bush III. I am proud that my Republican Party, with the exception of a couple traitors in the Senate, refused to go along with this latest bailout of corporate crooks and irresponsible citizens.
Yeah and if anyone is really
Yeah and if anyone is really buying a house in this market you might want to think twice about it. I mean really, housing values are already falling from what they were last year. We haven't even hit bottom in this fastly becoming depression, which would imply that the value you buy your home at today will also fall within the year. Why would you even consider doing this? For 8,000? That's just not a good idea.