As the first of the $600 economic stimulus checks start to arrive, a local community has decided to roll out its own version of a "homebuying stimulus package". From the Manhattan Village Board (Manhattan, IL) as reported in the Joliet Herald News:
Effective today, any homebuyer who purchases a new single-family home, duplex or townhome will be eligible for a rebate of up to $5,000. Each of these homebuyers, for approximately the next 14 months will receive a check from the Village of Manhattan at closing. These funds may be used at the homebuyer's discretion for such things as down payment assistance, closing costs, mortgage points, and construction options. Families who purchase a new single-family home will receive a check for $5,000, and those who buy a townhome or duplex will be eligible for a $3,500 check.
I believe that this idea is genius. Now granted, I may be biased as a Realtor® and I admit I am not an economist, but this is real proactive thinking.
That $600 stimulus check? I know alot of people who will be stimulating their credit card company more so than the economy. They'll be paying down debt rather than making new purchases. Salve on a wound.
As for real estate stimulus, the media focus has been on aid to folks who have been or are being foreclosed on. The concept of aid for these folks is a great idea, but it is reactive; they are already in trouble and the aid is either to allow them time to recover or stall the inevitable. Band-Aid on a wound.
By offering a rebate as Manhattan is doing, qualified buyers are encouraged to get off the sidelines and participate in this great buyer's market. It benefits the buyer without having to lower mortgage standards. It benefits the village and local retailers, without cost to either (paid by developer impact fees), and it helps the struggling builders by moving their inventory.
The Manhattan plan isn't a panacea (its only for new construction), yet its a great start. And the stimulus checks and foreclosure relief plans are greatly appreciated. But if someone could figure out a "rebate" or "plan" to match qualified buyers with the homeowners in financial distress, well now that would be stimulating!
Comments(2)