When the government came out with the tax credit program for first time home buyer, and later extended and expanded upon the program, I wondered what effect was this REALLY going to have.
- Would this program bring buyers that could not normally buy a home into the market?
- Would this program reduce the decision time in which a buyer was planning on buying a home?
- A combination of the above.
This will be pretty difficult to prove if I was right; but, if we see bad August numbers, but not as bad as the year to year difference from July, there may be some validity to my prediction. If we see a continued decrease in the reduced sales from last year, I may be correct. At year's end, we can then compare year end numbers versus year end numbers from last year to see the net overall effect. I truly think that the only difference will be those buyers who could not have normally bought into this market, but was able to do so because of the tax credit. If this is true, the net effect at the end of the year would be negligible. So yes, I believe that the tax credit programs were ineffective if not destructive as it was a short term fix that could have long term implications.....maybe.
All I really care about is job creation, not project creation or housing, as all will fall into place when jobs are in place. Luckily we are seeing job growth in Texas, so I see our future as promising in 2012....and maybe a tad in 2011. The hard hit areas, perhaps 2012; but this is all based on what happens with real job growth and real unemployment figures (not what is posted by the government).
Normally, August is the slowest month of the year in our area market; yet, we are seeing traffic that we have not seen in a couple of years. Decision making is still a problem, but the traffic is there; thus there are people ready to pull the trigger, but they need the confidence to do so.
If August negative figures are negligible from the July figures (as a %), then I will acknowledge my error. If there is an improvement, I will keep this concept alive with a repost. I don't believe that we will end up in a double dip recession and the market is merely reacting on fear. I honestly believe that the closer we get to election day, confidence will increase, and positive job reports and homes sales will follow thereafter. We are several months away, but time will tell.
I am staying very cautious, but I don't think that the government is either analyzing this data or wants to post, for political reasons, that the tax credit program may not have had substantial net affect when all is said and done. The market will do what it wants to do despite what I or anyone thinks; thus, we will let the market speak.
Love to hear your thoughts...
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