It's fascinating to me that all the "experts" who supposedly have all the intelligence and run big companies continue to use their clout in Washington to push for an expansion of the tax credit to be available to "all" homebuyers, not just "first time" homebuyers. I pose this question: Besides first-time homebuyers, who exactly are "all" these other buyers? Answer: trade-up buyers.
Newsflash: Trade-up buyers already own something, and they have to SELL what they own before they become "all those" other buyers.
Expanding the tax credit to "all buyers" which is really intended for "trade-up buyers" will instantly create additional listing inventory that, without sufficient demand from first-time homebuyers, will compound the supply problem we already have, drive prices down further, and cause additional foreclosures as those in financial distress cannot compete and achieve a sale prior to foreclosure.
If they want to push for expansion of the tax credit to provide a financial incentive for sellers to put a sign in their yard so they can qualify as a trade-up buyer, then they better also push for the current credit to be modified to require the first-timers to buy from an owner-occupant and create the necessary demand for the additional 600,000 listings that are currently being lived in by the 600,000 trade-up buyers the expansion will supposedly deliver.
Focus on the kids and the rest will take care of itself. Modify the tax credit so if a first-time buyer wants $8,000 of taxpayers' money, he or she is required to purchase from an owner-occupant, freeing that homeowner up to buy from someone else or build new construction. When a first-time buyer buys an REO (bank-owned property), no one else moves.
Require them to buy owner-occupied and enjoy the recovery.
I don't know about anyone else out there, but I have a boatload of trade-up buyers. They aren't looking for a tax credit to encourage them to buy again -- they're looking for a first-time buyer.