Real Estate Stimulus

Posted on February 06, 2009

At first, I was not a proponent of “stimulus”…I knew the same old “pork” add-ons were a sure bet. I know something’s got to be done…but, I’m certain that we don’t want to continue making the same mistakes in haste…Housing is the backbone of our economy. Careful consideration of those items which the experts feel would stimulate the slumping housing market are necessary…

I don’t know if any one item in particular will help get reluctant buyers off the fence, but a combination of several incentives might work. I’m glad that the latest Homebuyer Tax Credit bill was passed by the Senate yesterday. It still has to go through the House and get the president’s ok…As it reads, it will double the current tax credit of $7,500. (or 10% of the purchase price of the home, whichever is less). The newest proposal, introduced by Senator Johnny Isakson, a former real estate agent, will cost the federal government about $19 billion as part of President Obama’s package. The tax break passed last year was only given to first time home buyers and needed to be repaid…The new tax credit of $15,000 does not have to be repaid–(unless the homebuyer sells the home within two years of closing). Purchases must be made within one year of the legislation’s enactment AND it will apply to ALL primary home purchases, not just first time home buyers! Add that to the banks getting a handle on short sales and foreclosures, and the possible government buy down of mortgage interest rates and we might just begin to see the beginning of recovery folks!

Regarding the tax credit; Jerry Howard, chief executive of the National Association of Home Builders said, “it will put the floor on the downward spiral” in home prices.

National Association of Realtors president, Charles McMillin was quoted as saying, “I’m thrilled. It’s almost like we asked for the stars and landed on the moon.”