Okay ... I'm interested in a real discussion. ALL POINTS OF VIEW WELCOME, ENCOURAGED AND RESPECTED. I'm not looking for platitudes and feel good/philosophical comments ... I'm looking for real feedback.
I want to understand what people understand and why they think they understand it.
The Home Buyers Credit was approved by the House of Representatives, and the Senate and now needs to go back to the House of Representatives and get signed by the President.
Here's an outline of what it's supposed to look like (barring any additional revisions I haven't heard about yet):
First Time Home Buyers Credit of up to $8000 is to be extended. Must be under contract by April 30, 2010 and closed by June 30, 2010.
Home Buyers Credit of up to $6500 will now ALSO be available to existing homeowners that have owned property for the last 5 out of 8 years. Must be under contract by April 30, 2010 and closed by June 30, 2010.
Does this HELP or HURT or BOTH ... and WHY?
Some of the benefits as I see them are:
The Home Buyers credit stimulated and increased sales in many, although not all areas of the country. This helps sellers that need to sell, helps buyers that want to buy due to currently low interest rates and significantly decreased home prices, it reduces inventory, stabilizes sale prices and assists the overall economy with the peripheral economic benefits that are derived from increased real estate activity (people need furniture, home repairs, contractors, landscapers, electricians, plumbers, Realtors, home inspectors, appraisals, attorneys, etc. etc.)
Some questions and concerns I have:
There are two things we can count on ... at some point the home buyers credit will end and interest rates will go up. Is what the current administration doing inflating another mini real estate bubble? What happens when the tax credit ends and the interest rates start to go up? Will we see another precipitous drop in market value and activity again? Are we just delaying the inevitable corrections that need to happen in individual markets? Or, will this "stimulus" push the housing market through this rough economic patch so everything stabilizes and the real estate market returns to normal levels of price stability and activity?
Then there are other points such as if the government can bail out the banks, well then they can certainly help the little guy as well with the home buyer credit. This is "free money" to home buyers, which they will then supposedly go out and spend to stimulate growth in the economy. Will this then aid in the so-called "jobless recovery"?
But ... is this money really free!!! At the end of the day don't we ALL have to pay for this? Won't we all have to pay for the Cash for Clunkers free money? The bailouts to banks? The cash for refrigerators for goodness sake!!!
I see lots of people looking at the home buyers credit from a personal perspective ... personal in how it helps THEM. I understand that, but shouldn't we also look at it from a bigger picture perspective also? Because although these things may help us TODAY ... will they hurt us done the road.
And if so, will it hurt more or less then ... and will it have been worth it? Should we be thinking about these things now, or continue to abdicate our personal responsibility in understanding how all these moving parts will ultimately come together?