Awhile back I wrote why I thought the $8,000 tax credit was a bad idea. Now here we are coming up on the November 30th dead line and no one is sure what December 1st holds for the housing market, but a lot of real estate agents are nervous and I’m one of them.
This $8,000 tax credit created a false housing market, including increases in buying and prices over the past couple months. But what happens when these buyers are gone? We are left with a completely dead real estate market. (In my opinion)
So, now that things are already screwed up and we are possibly headed for another little crash in the real estate market and we are left looking for answers. I’m going to look at our pets for answers. If you have ever had a dog, cat, or in our case a pig, you know that you can’t take them away from their mothers too quickly. (That is what will happen on December 1st, 2009.) First time home buyers will be pulled out of the market way too early.
Now, what if we were to wean them away from the tax credit like you do a pet from their mother? Maybe offer $7,000 if close before January 1st and then lower than amount over time until we reach no tax credit at all. Maybe then the housing market could slowly drop, rather than take a complete fall on December 1st.
If by the time we have weaned the first time homebuyer off the tax credit our economy hopefully will have picked up enough that regular buyers will be ready to buy again and investors will be out purchasing homes again.
Even though I disagree with the tax credit in general,we need to think of something to help the housing market continue beyond December 1st, 2009. Since they already started this mess, maybe our government should look for ways to fix it or maybe just let it take its natural course and in a couple years, it will recover on its own.