From the NY Times – Congress Poised to Keep Homebuyers’ Tax Credit
The Senate might pass its version as early as Wednesday, and aides to Congressional leaders say the House could accept it this week, sending the bill to President Obama to sign into law. After weeks of partisan delay in the Senate, Democrats are eager to show progress before Friday, when the October jobless report is again expected to show high unemployment.
The homebuyers’ credit — enacted last year, expanded this year and scheduled to expire Nov. 30 — would be extended to cover homes under contract by April 30. Also, it no longer would be limited to first-time buyers; people who have owned a home for at least five years could get a $6,500 credit on a new residence. Income limits for eligibility would be raised, making many more people qualify.
Not a tremendous shock here. I spoke with a bunch of people during the late summer and they all were pretty convinced that the credit would be extended.
There have been a lot of people rushing around the last few weeks trying to close before November 30 and get their eight grand from Uncle Sugar. This should calm people down a bit and maybe let people move their closing dates into December to lighten the load on mortgage people.
I know a couple people who already scheduled their closings for November 30. That day was going to be all kinds of crazy. I bet it’s still going to be crazy, just less so.
Hip hip hooray for “second-time” home buyers!
That’s ridiculous. As if the gvernment doesnt already pour enough money it doesnt have down the rathole….first the banks, then the car companies, and now healthcare and homebuyers. When is anyone going to say enough…
Harriet,
I agree completely.
-Moose
Moose and Harriet need to brush up on their John Maynard Keynes.
http://www.amazon.com/General-Theory-Employment-Interest-Money/dp/8126905913/
Here I think that the HIB world will be flabbergasted at this Kumbaya moment of unreserved agreement between Harriet and I, and along comes Gary to slap us both down! 😉
We can talk monetary policy another time (we’re turning Japanese). My objection to the used-house-sales-industry-hangover-remedy (hair-of-the-dog?) tax credit is that it will simply be absorbed into the sales price, and therefore be of no net benefit to the buyer (ME!). Just like the home mortgage interest deduction. It is, therefore, a windfall benefit to sellers – just like the housing bubble itself. It is paid for by the taxpayer (also me).
Look at Cash-4-Clunkers. Car dealers loved it, because it goosed their sales volume, and NOBODY negotiated down from sticker price. Who cares if it’s overpriced, because buyers were getting $4,500 free money from me (taxpayer). Pitched as money for buyers, the buyers were just the bag men for getting it to the sellers.
Not to mention the 4-year old first time home buyers and other assorted frauds. The tax credit is simply more ‘extend-and-pretend’ for the housing market.
Also, the deal keeps getting sweeter. Maybe I just wait until the next round of extensions, the dollar amount might go higher in addition to expanding the income and status eligibiilty. The lack of credibiilty that its going away anytime soon robs it of its desired effect of creating urgency in the buyer.
What I do not understand is why the 2nd time home buyer has to have owned their home for more than 5 years. If that was the case, they likely bought before the real estate boom. Even in this economy, they are still likely to make a profit on the sale of their original home. It is the homebuyers who have owned less than 5 years (ME!), who are losing money on the sale of the original home. Kinda sucks!
NewBVResident, I assume it’s to weed out house profiteers, not that there are many of them left these days.
OT,
The following isn’t me talking, its Karl Case, of Wellesley College and the Case-Shiller Index (top billing!), as quoted in the NY Times today:
http://www.nytimes.com/2009/11/05/garden/05appraisal.html?pagewanted=2&_r=2&ref=garden#
“If you are not in a rush to sell and can accept having to lower your price later, then go with the Realtor’s price.” “If you want to be realistic, go with the [appraiser’s lower] estimate.”
To distill,
* Your house isn’t worth what as much as the used house sales flack says it is; you’ll have to drop your asking price to even attract an offer, and
* “Realistic” prices in this market are what an appraiser is willing to be held accountable for, not what a used house sales flack (including “buyer’s brokers”) who has no accountability says.