Comments on: How Critical Is The Home Buyer Tax Credit?

By: AZSALUKI

AZSALUKI — Thu, 05 Nov 2009 16:32:09 +0000

you’re right linenoise (and i agree they shoulda let the market fall naturally). but if i had the option to buy the same home for 92K, OR buy it for 100K and be given a check for 8K…..i’d choose the latter. it’s the same reason so many people that could’ve put a down payment towards their purchase chose to go with 100% financing….more cash in your pocket now.

By: azrob

azrob — Thu, 05 Nov 2009 01:58:35 +0000

while the AVERAGE home in Phoenix might have gone up 10K in the last three months, in reality starter homes have gone up more like 40K. Many many people are paying a lot more for small homes than just a few months ago, and home flippers are making a killing with the help of this credit.

Meanwhile, anything in the valley over 300K has continued to decline, anything really expensive, or not FHA loanable (such as a ton of condos) is still in complete free fall.

I do not think this credit will have the same effect however; the supply of credit worthy (ok FHA credit worthy) buyers is simply not infinite, and most people who have owned for five years either won’t want another home, won’t be able to sell the current home, and/or are underwater. Land lording is a terrible risk right now, so buying a second home for the credit is a seriously flawed idea.

By: Linenoise

Linenoise — Wed, 04 Nov 2009 17:16:19 +0000

azsaluki: “but i think most of the buyers bought because they felt that they were finally getting a fair price”

Isn’t that exactly what the tax credit proves? If someone selling a home for $100,000 drops the price $8,000 (8%), they have more people willing to buy? So why not let the prices drop without using taxpayer cash to do it? Oh, right.. politicians have to look useful even though we all know they are not.

Igor is still ’saddened’. Might want to get him a depression counselor, he’s been this way awhile!

By: AZSALUKI

AZSALUKI — Wed, 04 Nov 2009 15:26:55 +0000

twist….exactly what i’ve thought. this past summer i said “why would i buy now (if i were a first timer)if in a year or two the gov’t may more or less give me a home?” obviously, some people decided to jump in based on the credit, but i think most of the buyers bought because they felt that they were finally getting a fair price. you’re also right about the $6500 credit. i’m pretty sure if you’re patient, you could negotiate the price down by MUCH more than $6500 on a $500K home.

By: John M.

John M. — Wed, 04 Nov 2009 14:44:43 +0000

twist - Doomers who have been following the under-construction AEI Subprime VI seminar will have perhaps noted that John Makin, commenting on this issue, just supplied the transcript's Letters of Fire.

1:36:34 … This crisis was caused by massive government subsidies to purchase homes by people who couldn’t really afford them. So what does Congress do? They pass an $8,000 tax credit for people who can’t really afford to buy a home to buy one. I mean, how stupid can you get?

Igor is "saddened."