Governor Schwarzenegger signed Assembly Bill 183, which means tax benefits will continue in California for first time home buyers and others who purchase previously unoccupied properties. Will this stimulate the economy? I certainly hope so. Realistically, how many construction jobs will be created in California with that money? No enough to stimulate the economy? Only 100 million will go toward the new home buyers, and I am not sure if that is enough to help with all of the short sales what will be coming on the market. 
I know that everyone is hearing about how our economy is recovering and the stock market is going up. There has been so much intervention from the government that prevented the housing market to hit bottom. Now, President Obama is rethinking whether or not he should have allowed the process to take its natural course. We have been through these levels of drops and rebounds throughout the history of our country but never with this type of interference. It just doesn't make sense, with the Controller of the Currency and the Office of Thrift Supervisions showing 21.9% of mortgages are still falling behind by more than 90 days.
If we don't want more foreclosures causing thefts and declining communities, the answer is short sales. We will have to work on streamlining the foreclosure process and have the government allow the servicers to negotiate short sales. There are too many people working on every file. Across the board, there needs to be some type of consistency with short sales. This is where the money should have gone, and not directly to the bank employee's bonuses, to stimulate the economy.
Zell, his name if like Buffet (but in the real estate industry), says that the last recovery was tied to the growth in real estate. That isn't going to happen again because of the taxation and regulations that will hamper economic recovery, rather than stimulate the economy.
Comments(0)