Another Federal Tax Credit for Homebuyers?

Tom, it certainly seemed to me that many (I don't know if I can say "most" but it was a lot) of the homebuyers that took advantage of the federal homebuyer credits bought short sales and foreclosures. However, this glut of empty and distressed homes has to be handled in some manner. Perhaps the tax credit could focus specifically on puchasers of these sorts of homes.

Until these houses are off market, home prices will continue their downward spiral and move-up buyers just can't buy new. They have to sell their own homes first. And those home prices are drastically affected by short sale and foreclosure properties.

Tom~ Thanks for the information! I have to agree that there will probably less action in purchasing a home with a third round of credits compared to the first.  But I still think it would help some, people like to feel like they got a deal, somethings never change...  :0)

Will this madness never end?  Remember in November!

Thanks for sharing..honestly, are we surprised??  Everyone would ask me if the market was getting better and my response was, "we will have to wait until after the tax credit".

The Federal Government helped create the mess of artificially high home values to begin with and any further help... is only delaying the inevitable. If it was not for all the meddling and hundreds of billions of Taxpayer dollars wasted.. we would be MUCH further along in a truly sustainable recovery.

The flip side of your analysis of the charts... after the credit ends... Home values and sales still drop.

Do a third round.. prices will still drop when it's over...

Do a fourth round... prices will still drop when it's over...

Values will stop dropping when they hit a number that correlate to the state of the economy.

"I think we would be far better off putting people back to work."

Well Stated... And Private Corporations are sitting on Trillions of Cash not wanting to spend it or hire because they have no clue where this wishy washy incompetent Congress is going next.

Tom, this is quite an interesting possibility...guess we'll all have to wait and see what happens. :)

Leilani

Tom - hard to believe that our current government officials do not seem to understand that they need to leave well enough alone.  A third round of tax credits will only delay the inevitable.

It is interesting to note that the credit is not as helpful and providing jobs to the buyers and seller.  That would create a real boom.

@ Tom,

I don't agree that they ended a free fall to nothing value. (Not sure if that is what you are suggesting.)  Buyers were coming back into our market before any buyer tax credit subsidies were put in place and for some certain neighborhoods that I know VERY well that were allowed to correct... prices in these neighborhoods have been stable since late 2008. (After being brutalized.) I now see weakness in others that have somewhat held on until now...

All the local little sub-markets of Las Vegas real estate aka ground zero for distressed real estate. 

For example... newer neighborhood homes built in 2006 where the builders played the opportunity like a fiddle and sold at the highest prices possible took a beating in 2008. Sellers got out and moved on... these neighborhoods have now come back to life. Happy new Homeowners with some pride in what they own and don't think they got screwed over. Other little sub-markets of Las Vegas have now come to reality and are just now getting hit with foreclosures... not a pretty scene.

If you take a look at the markets at or above the 27% average of the latest reports of the decline in home sales after the latest round of homebuyer tax credits expired.... you'll notice that they are not markets that had significant declines such as markets like Las Vegas, Phoenix, Sacramento, etc.... Markets that were decimated in value before the Govt. got involved trying to prop up something that was artificially inflated in the first place....

THE REAL STORY in the latest news is how many of the markets contributing to all of the latest bad news were not allowed to correct in the first place...

Something I'll be working on...

Tom - I'm going to stay well away from the political implications here but do agree that we would see a far greater impact on the housing market if more of our populus was employed.  A credit only helps if you can afford to purchase and I'd be surprised if there are that many 'on the fence' buyers that would step up for a credit.  Especially if you consider how low interests rates are and how much of an incentive that is on it's own.  Let's get people working again and create a bigger buyer pool instead of throwing better bait into that pool.

Every buyer we stimulate, means it will hurt more when it goes away.  I am not a fan of any credits.  We are only borrowing tomorrows buyers.

Tom, pumping more tax money back into the market is only putting a bandaid on the problem.  I'd like to see the market rebound on it's own. 

I hope NOT! This is not good for our national bottom line and if only politicians do what's best for us instead of thinking what will continue to keep them there. I've decided that this is now a political issue rather than an economic issue.

If it happens, I'll continue to bust my butt, it will only make it that much closer to my financial goal.