Should the Home Builders be Getting a Break From Congress?

By
Real Estate Agent with Keller Williams Preferred Real Estate

Over the last year home builders have taken huge losses. Now Congress announces a bill that will help home builders by providing them "tax credits" & "rebates" to basically bail them out and help some of them from going bankrupt. Interesting enough, earlier this year when this bill was not included in the Economic Stimulus package, the National Association of Home Builders were not very happy, and said it would stop making contributions to congressional candidates "until further notice".

Please read the full article here Home Builders Get Break From Congress

My opinion:

The homebuilders should not be getting tax rebates/breaks, period. All businesses are subject to gains and losses. You didn't hear the homebuilders complaining when raking in billions of dollars. But now that they overbought, overbuilt, and their investment is not as good as it was a few years back, they want help. Maybe they should have scaled back. Didn't the management know about this thing called "overexpansion"? Instead they kept purchasing land and building homes at the top of the market. The Congress shouldn't bail the home builders out. If they go bankrupt, they go bankrupt. That is the name of the game. Bankruptcy exists for a reason. Companies prosper and they fail. How about all the other businesses that have seen steady declines due to the downturn in housing? Should Home Depot or a furniture retailer seek help from Congress because their business is not thriving like it was a few years ago and now they may be taking losses on their balance sheets? If you or a family member have a small business which was once prosperous and has taken a turn for the worst, do you think the government is going to bail your small business out and keep you from going bankrupt? No. These sorts of actions by the government disrupt the free markets.

I would like to hear other opinions on this issue.

 

Joe

 

 

Please visit our website Bucks County Real Estate

Providing Real Estate services to the Bucks County communities of Levittown, Fairless Hills, Bristol Boro, Yardley, Bensalem, Newtown, Holland, Langhorne, Morrisville, Croydon, Buckingham, Wrightstown, New Hope, Tullytown, Richboro, Lower Makefield, Upper Makefield, Falls Township, as well as Montgomery County, and Philadelphia county.

close

This entry hasn't been re-blogged:

Re-Blogged By Re-Blogged At
Groups:
Philadelphia, PA
Tags:
home builders
foreclosures
congress
econmonic stimulus
tax credits
tax breaks
lobbying

Spam prevention
Show All Comments
Rainer
31,150
Johnny Huang
Pleasant Hill, CA
Insurance and Real Estate Broker
I don't think anyone should get a break if they have already reaped earnings from years past, Bears Sterns included.
Apr 03, 2008 04:23 PM #1
Rainer
19,143
Joseph Grabowski
Keller Williams Preferred Real Estate - Yardley, PA
REALTOR - 4saleinbucks.com

Hello Johnny,

What happened to Bears Sterns shareholders and employees was a disaster, and it did not have to happen the way it did. But if you think about all those shareholders & employees who lost all that value in their stock and had their retirement savings wiped out, do you think Congress is going to come in and give them a nest egg of some sort? No. These companies were involved in risky investing, including the home builder who just kept building. I can't even comprehend that home builders management, analysts, and other industry professionals did not see this coming. I don't believe it. Did they think it would just keep going up the way it was? Crazy!

Apr 03, 2008 04:33 PM #2
Rainmaker
325,921
Esko Kiuru
Bethesda, MD

Joseph,

That's it. Feds helping out BearStearns avoid bankruptcy is somewhat acceptable since its fall was going to shake the mortgage and financial industries real good. But doing this for home builders is a joke. Bad management deserves what comes down the road.

 

Apr 03, 2008 05:08 PM #3
Rainer
19,143
Joseph Grabowski
Keller Williams Preferred Real Estate - Yardley, PA
REALTOR - 4saleinbucks.com

Esko,

Maybe the Fed. shouldn't have intervened with Bear Stearns. Even if it rocked our financial system, at least we would know how deep the problems really are; once we hit the bottom, we can start the rebuild. Sometimes I feel they are prolonging the inevitable. If these investment banks went belly-up, and caused a deflationary colapse in the housing prices, inventory would get bought up. There are so many homes for sale. Until the inventory starts to get absorbed, home prices will continue to fall.

Apr 03, 2008 05:19 PM #4
Rainer
109,059
Linda Tremblay
Long & Foster Real Estate, Inc, PA License #AB065488 - Doylestown, PA
Associate Broker - Bucks County, PA Real Estate Services
I do not think the government should bail out the homebuilders or the banks.  If they are going to help soemone, maybe it should be the everyday homeowner. They give all the money to the banks and the banks still foreclose on someone who may get a little behind and will not work with them to keep their home. If you do business and want to make a huge profit, there is a huge risk.  They had to of known that going in. 
Apr 04, 2008 03:15 AM #5
Rainer
19,143
Joseph Grabowski
Keller Williams Preferred Real Estate - Yardley, PA
REALTOR - 4saleinbucks.com

Linda,

Thanks for the response. My sentiment exactly.

Apr 04, 2008 03:39 AM #6
Rainer
28,875
Eliud Gautier
Acre Mortgage & Financial, LLC - Deptford, NJ
Branch Manager
Absolutely not! But when you have bank CEOs,Chairpersons, and Board members obtaining forgivable loans from their own bank in order to then give this borrowed money to the local US Congress and US Senate candidates - like Commerce Bank - should we be surprise that these US Legislators will continue to bail out banks.
Apr 05, 2008 02:43 PM #7
Show All Comments

What's the reason you're reporting this blog entry?

Are you sure you want to report this blog entry as spam?

Rainer
19,143

Joseph Grabowski

REALTOR - 4saleinbucks.com
Ask me a question
*
*
*
*

Additional Information