The video from CNBC on Dec 31 (attached link) is interesting.  Varied opinions by the "talking heads".  The idea that we can refinance our way out of the current housing crises is not realistic in my opinion.  Ultimately it is the uncertainty around the job market that is keeping many of the home buyers on the sidelines.  I can't tell you how many times I have worked with a motivated 1st time buyer who pulls back due to a job loss of a spouse or a perceived/potential job loss.  Lets face it, it is the first time buyer that drives the home buying engine and creates the domino effect of cascading purchases. 

There was a suggestion that the Federal Tax Credit for 1st time buyers is not well designed to that job in that the benefit comes after the purchase.  If you can not provide the funds up front, then this eliminates those who are struggling to put together money for down payments & closing costs.  One of the benefits of this program as currently designed is that it does not require a bureaucracy to administer it.  It is folded into the Federal tax return process.  If up-front grants are used in its place - to be paid back over the 15 yr period, that would require another group to administer the program and create more government bloat!

Stabilizing the job market and restoring consumer confidence will play a major part in the recovery of the housing market.  How to achieve that is a whole other discussion.  My personal philosophy is to ensure that we do not punish success in this country by increasing taxes on business.  New Jersey, where I live has such draconian regulations that effectively strangle the growth of business in the state. 

Lastly there was a discussion around the timing of the housing market turnaround.  Opinions ranged from a turnaround in 2009 to mid-2010.  No surprise here.  Of course this will vary from market to market.  In Middlesex Co NJ, we are seeing increased buyer activity, but it has not yet translated into a significant increase in home purchases. Anecdotal evidence suggests that listings are coming on board after the holidays, pushing up inventory which will further depress prices.  Hopefully I am wrong.