The newly crafted $789 billion legislation brings some bad news for Charlotte's struggling housing market.
Lost in a compromise between House and Senate negotiators Wednesday was a $15,000 tax credit for people who bought a home in 2009, reports say. A $7,500 tax incentive for first-time homebuyers remains. That incentive, which was part of 2008 legislation, is essentially a no-interest loan.
The $15,000 tax credit would have applied to all homebuyers. It had been hailed by the housing industry and other consumer groups for its potential to kindle a sagging homebuying market and spark retail activity as homeowners readied their homes for sale.
Such activity could have been a boon to markets around the country, including Charlotte, where home sales tumbled to a new low last month, and a decline in pending sales showed the struggles are likely to continue.
No word from legislators on why the $15,000 credit was whacked, but there was some disagreement on how effective it would be. The National Association of Homebuilders said the credit would create a quarter-million jobs (although it did not say how it arrived at those optimistic numbers.) Lending experts, however, wondered if the credit would have been enough to convince enough hesitant homebuyers to make the leap.
Would the credit have made you more inclined to look for a home in 2009?
Your morning edge:
Slate's Daniel Gross says that if you listen to the Treasury Secretary, the economy is even worse than President Obama is indicating.
Here are the 25 people you can blame, from Time.com.
Homebuilders are hoping to boost sales by going green with their houses, the Wall Street Journal reports.
Thursday, February 12, 2009
A stimulus disappointment?
Subscribe to:
Post Comments (Atom)
Posts
31 comments:
I will say this simply, were this $15,000 credit available I would have bought a new home immediately. This would have been enough incentive for me. However, with it gone I will not touch the housing market right now. Also, since I'm not a first time home buyer I'm not eligible for the $7,500 incentive. As such, since there is no incentive for me to take any risk I will wait on the purchase of a new home.
Wait a second, a few years ago, Lawmakers were talking about 'making housing affordable'. Now that it is affordable (because house prices are falling), people want to prop prices back up. Funny thing, that.
Fortunately, somebody had some sense, at least in this particular area of the stimulus package.
The last thing taxpayers need to do is pump yet another subsidy into the pockets of the "titans" of the real estate development industry, especially in a place like the Charlotte metropolitan area where this parasitic industry has been probably the biggest recipient of both direct and indirect taxpayer subsidy for decades.
The result of all these years feeding at the trough: the deliberately-created oversupply of housing, which continued to hurt owners of existing homes; the utter destruction of our environment; runaway tax increases as taxpayers struggled to pay for the infrastructure needs (such as schools) created by the (over)developers who tirelessly lobbied against mitigating measures such as impact fees.
This industry deserves more taxpayer handouts?
NO WAY!
My wife and I had already decided that we would purchase a home in 2009 if the $15,000 tax credit went through. Now we'll probably wait until 2010 or beyond...
to use $15k in one year, you would need a large income already to the point you were paying a full $15k in Federal Taxes to really benefit immediately to it.
If they wanted to do this, I don't see why they wouldn't just take last years legistlation on 7500k, extend it thru 2009 instead of this summer and then double the amount. Instead of something new.
This congress is complete idiots as they've already shown. Pelosi needs to exit stage left ASAP
Geithner has yet to release the Financial Stability Plan details...During his speech he made reference to committing $50 billion to assist with the housing crisis, so hope is not lost...yet.
Way to go Rick B.
Well stated
Since I bought a new home last year, it wouldn't help me a bit. AND I would feel like I got shortchanged by the government. So, I'm fine with this credit being lost. Used & new home prices have dropped so much lately that buyers will probably be getting the home for a discount of $15K or more over 2007 prices.
Of course this $15,000/$7,500 was just returning some of OUR money that was taken away in taxes to begin with. And it is only a temporary return of our money as you still have to pay it back.
When will the Fair Tax Plan get it's due attention?
Absolutely Rick B. We need capitulation and the only way to get there is to stop inflating the money supply.
Government cannot sustain markets. I am a bleeding heart liberal, but I know this to be true. Greenspan economics has failed.
We were going to use this $15,000 to make up for the loss on the sale of our house and purchase a new one. I have already informed my realtor that we are not moving forward becaues it has been removed from the bill. This is too bad because this credit was the real incentive to move forward on selling and buying a home. I think it's time that more than just 1st time buyers get something out of the deal since we have lost all our equity in our homes. All the help goes to the people who screwed up and nothing goes to the people who have done it right.
Absolutely. I have been scouting possible home purchases during 2008 and this would have been a strong motivator to buy. Now, I feel I can continue to wait for even lower prices because there are no other buyers around to compete with.
Cheer up. Will get more in food stamps. One of the so-called experts said that it was a great move b/c the stimulus multipier for it is 1.73. I just wonder why we all aren't on food stamps?
I would love Fair Tax
Here is new one homebuyer the idiots just lost. I sat out the boom years of OVERPRICED JUNK and now am one of the ones NOT worried about a house I CAN'T AFFORD. I will keep what I have and NOT contribute one dime to this boongdoggle that will fail miserably anyway. It has long PAST TIME FOR THIS Commie country to reward WORK AND SAVERS! AS THE OLD SAYING GOES, CASH IS KING!
The idea that Charlotte builders are a "parasitic industry" is sick and wrong. This industry more than any creates and supports jobs. Think about it. A new home is built and not only are there construction workers, but suppliers and manufacturers of the products. Plus, the cable guy, the exterminator, the yard maintenance company, cleaning services, etc., all small local business get to employ workers to support these homes. And, the new residents in these homes go to the local drycleaner, gas station, restaurants, hair salons, grocery stores, etc... And, all of these "local" businesses generate taxes from these sales that support the local gov't - schools (more jobs), police, fire, etc, etc... Housing more than any other industry generates and supports jobs and tax revenue.
The recession started with housing falling down (due to greedy investors and lenders) and fixing housing first would have turned the economy around most expeditiously. Now we'll simply need to wait and see how Washington's pork-filled plan can take effect.
The whole mess disgusts me - partly because I seem to be ahead of the curve and never see relief. In the early 80's I bought a Condo for $85k and when I wanted to sell in the early 90's (got married) the market tanked. After renting it I sold it in '96 for $12k - - as the banks had a portfolio of them from foreclosure. What did I get? A sizeable cash loss called a "Capital Loss" which the Govt says.... can offset any Cap. Gains - ZERO TAX RELIEF. Bought House in 91 for $185k, left that area (job relocation) and sold in '97 for $145k.... same deal.... That's a total $110k wack (plus front loaded interest payments) that I will NEVER recover from. Indeed I am again in a somewhat comfy situation - but must work and have no extra for the "vacationing" lifestyle one would expect. I doubt I will ever see "retirement" as there is no way I can invest to make it up.... Thanks Rich Fat Cats.... keep $crewing the little guys.
I'm one of those who wants to sell my house, but even I, a business-owning Democrat, thinks the $15K would serve only to help companies, not people, and further prop up prices that are too high. If I really want to sell, which I do, better that I give a $15K price break to the buyer so in the long term I, when I'm nearing retirement, and my daughter, as she gets out of college, don't have to suffer the consequences of yet another ill-advised stimulus scheme.
The foundation for the current financial crisis was set in motion by Bill Clinton in 1999 with the Financial Services Modernization Act which did away with restrictions on the integration of banking insurance and stock trading (Glass Steagall Act of 1933).
I'm just thankful for the extra $13a week I'll be receiving in my paycheck from the "stimulus" package...yippee
This whole thing is a huge mess. I have worked in the mortgage market for 20 years and haven't had a perm job since August 07 when all this mess started. I have worked off and on doing contract work but big deal when you can't get help.
How about this? I called my credit card company to say my payment would be five days late. Yup FIVE days. I made the payment but because it was FIVE days late they changed my interest rate to double!. I kid you not. I guess being honest doesn't mean a thing today. I struggled to pay them but I did do so. I guess they would rather get no money because with a doubled rate its impossible for me to pay. Go figure. I have worked in the credit business for years and yes everyone is hurting but come on people. Help those who are trying to help themselves.
13 bucks a week doesn't even buy a case of decent beer.
Thanks, Uncle Scam.
Rick B, you're a fool.
Small home builders receive no subsidies from the government and we're getting killed by market conditions we did not create.
This would have been the only freaking part of the stimulus to stimulate anything. Instead now we can spend 300 million on green golf carts... way to go Washington.
Congress cut the $15,000 tax credit for buying a new home and they cut tax credits for individuals/couples from $500/$1000to $400/$800. The tax credits will begin in June and will average to about $13/week. Please someone tell me how a mere $13/week will help me pay off my current debt or save to buy a new home... It will not fill my tank with gas or buy enough groceries to cook a meal for a family of 4.
Congress can take their mere $13 per week and use it toward more wasteful spending... We don't need a bone thrown to us... We need a life line!!!!
Anonymous @ 9:52 The Fair Tax Act will be considered when it benefits those at the lower end of the scale, not the rich (which is what it's set up to do)- so don't hold your breath.
Anonymous @ 11:19 The Glass Steagall Act was repealed by the REPUBLICAN Congress in 1993 by a supermajority that would have overridden a veto by Clinton - so who's fault is it again???
Obama should be more responsible in telling people to spend who cant afford to spend and already under water on homes and credit cards etc along with the millions of jobs being lost.
In the end though this is all irrelevant anyway since we envision America splitting up into 3 separate countries as the famed Russian professor recently predicted.
America will not come back and things are only going to worsen as never before. Chaos in the steeets will occur and possibly civil ward will erupt everywhere.
Anarchy will ensue since the military is occupied in bogus foreign wars created by Bush to assist.
Total collaspe of America will occur who is already poised on a slippery downward spiral and halfway there.
At that point America will split into 3 separate nations and this is the only way it can survive as it is right now too big and widespread.
There will be a western central and eastern nation.
There may be a provision for unified cooperations but unquestionably the Russian professor was correct as the USSR could not survive and had to be split and so did the Roman empire from 2000 yrs ago.
The whole concept of America has been totally bastardized anyway as the original founders envisioned only loosely consorted states without a centralized government to force its mightly hand and extort 100s of trillions in taxations and fight world wars or police the world. This has been a failure.
The demise of America is close at hand and the split up and restructure into at least 3 separate parts is on the near horizon since this nation is already 15 trillion in debted bankruptcy insovent and economists say this number closer to 100 trillion collectively and growing.
Prepare for the worst although we clearly see the former USSR functioning more efficiently as smaller nations and entities as Russia is doing.
Clearly the Roman empire fell and broke up for the same exact reasons we are witnessing today in America or whats left of the future destiny of a failed America ready to be split up like a pie.
This and the auto credit were actually two of the only parts of the porkulus that I thought would actually stimulate the economy. By stimulate, I mean create jobs and get people to actually start spending again. If you don't think that homebuilding and a healthy auto sector don't create jobs, your head is in the sand. Calling this bill stimulus is laughable; it's a giant welfare program.
Great eassy. I was wondering if you could give me an exact date on when the US is going to spilt into 3 different countries. I need to make sure I am in the right part. God there a lot of idiots in the city. The only way the economy is ever going to turn around is if people start to spend money and quick acting like this is the end of the world. YOUR AMERICANS, PULL YOURSELVES TOGETHER. We faced World Wars and a depression that were far worse than this. Just be glad we have a government that has the power and abilty to help there citizens in situations like these.
This was only thing in the bill that the average working person could take advantage of and they got rid of it...wonderful. I am so tired of the gov't. Who the heck thought that giving people $13 will do anything? Is there anything positive for the average american tax payer going on in this country?
Brendan... Your comment shows how little you know about Fair Tax. There are provisions in it that protect the little guy.
http://www.fairtax.org/site/PageServer
Agree. The federal government has been for ages nothing but a menace. The IRS creation in 1917 by Wilson to extort from your paycheck to pay for WWI was never abolished as they promised and only got bigger.
Today taxpayers pay 60-70% in total taxes and if you fail to pay the IRS will seize your property and you will have nothing. Fraud corruption and waste in federal government amounting to trillions annually. Bush was a catastrophe. Obama has no cure but spend more.
The end of America as we know it will occur before Obamas 1st term ends. Look for 2012 or sooner.
Washington is a centralized fascist socialized government already anyway and trillions forked out by Bush to nationalize banks and large companies to stay afloat and now more trillions by Obama will sink the Titanic called America. Wall St days are numbered.
Nothing is forever. Everything is finite with an alpha and omega. Split up coming. Panic alert.
Absolutely. My husband was planning on buying a new house just for the tax credit and so we could avoid capital gains.
Post a Comment