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Tax Credit Thoughts

By Jake Planton

Mortgage and Lending with www.JakePlanton.com 209327

October 28, 2009 11:25 AM

I am in the camp that they should not extend the tax credit. The numbers just do not support it, and I could link to articles on it. But, I am not going to do that right now (I can send you all some if you would like).

I am not trying to piss any realtors off, because they are my partners, but why is it that of all those I have spoken too, read their blogs, emailed with, ONLY realtors are for the tax credit extension? And when I say that, I mean those in the industry, lenders, title people, etc...why is that??

Let me reiterate this point, I am not trying to cause a fight, it is what it is, but I am curious.

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Ginger Moore

Wilkinson & Associates Realty - Gastonia, NC

Hi Jake, Well why would you not want a tax credit? Seems like it gets buyers off the fence to purchase homes, which helps us.. That is just my point of view. thanks for sharing

Oct 28, 2009 11:30 AM

Dan Grammatica

Realty Experts, LLC - Torrington, CT

e-PRO

They are going to extend and are voting this week on it with the unemployment beneifts see my blog at http://torringtonblog.com
I agree that we should just give everyone $5,000 with incomes of less than $200,000 family

Oct 28, 2009 11:30 AM

Jake Planton

www.JakePlanton.com - Portland, OR

Hey Ginger~ I have done a lot of research on the whole thing, because I like to have an informed opinion, and it is just adding up that it is not helping as much as it is costing us, basically throwing good money after bad. I think that it is helping a lot of buyers get moving, and realtors are really busy, but I wonder how many people are buying homes they don't really want, just for the $8K. There is so much fraud happening right now, the IRS is flooded. I sent this to my office earlier today.

This is providing a crutch, with Goldman Sachs coming out and saying this is increasing home prices by 5%. What happens to home values when it goes away, and we start getting all that inventory, 950,000 homes last quarter in foreclosures, coming onto the market? This is setting us up for a harder fall later. We should have let home values drop naturally, without artifically increasing home values with tax incentives.

Throwing good money after bad money...

This is a great article against the credit.

http://www.washingtonpost.com/wp-dyn/content/article/2009/10/27/AR2009102703791.html

I just see it hurting us later on...and my question still stands, why is it just realtors (from those I have spoken too) that want it extended?

Dan~ I do think the money could be used in a more effecient way, helping other people, like the extension of unemployment, or send some of that money to principle reductions for people way underwater...but another way to look at it as well is that this is hurting landlords/commercial property lenders/owners, because it is reducing the cost of rent all over the place, which is making it so people can't make their mortgages on their commercial property (I know, it is better to pay your mortgage rather than someone elses...but just a different point of view).

Oct 28, 2009 11:37 AM

Cindy Jones

Integrity Real Estate Group - Woodbridge, VA

Pentagon, Fort Belvoir & Quantico Real Estate News

I also am not in favor of the extension and if you look at the % of first time buyers who have taken advantage of it versus the number of homes sold the numbers don't add up. I have seen studies that say that each $8000 credit cost the taxpayers $43,000. The extension of the credit isn't a given. There are two different bills floating through the halls of Washington. We have become a government that selective decides who gets a credit and who doesn't.

If you want to track the official progress of Bills in Congress go to Open Congress and sign up to track the bills that are of interest to you and your clients.

Oct 28, 2009 11:42 AM

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