First-Time Buyers, RE Market
Source: RISMedia.com
"The housing market is getting a much-needed boost as first-time homebuyers rush to take advantage of an $8,000 federal tax credit that is set to expire Nov. 30, 2009.
The incentive is helping to slow the decline in home sales. In August, sales were down 1% over the comparable period last year, the smallest year-over-year decline in any month since late 2007. As Congress considers extending the credit, real-estate agents and home builders worry sales could slump again if it�s allowed to expire."
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I expect home sales will increase siince the tax credit has been extended with the modification of adding existing home owners to be eligible for the tax credit!! There are some additional requirements for existing home owners to qualify.
One must always be concerned about the side effects of government intervention and who will suffer from the artificial and temporary "free" money. As we saw how the "cash for clunker" program negatively impacted auto dealers and the used car market, we wonder what happens when they stop handing out the cash to home buyers. What will happen to home sales when it's over? And the impact on the rental market has been a dramatic negative force that landlords have been grappling with. It would seem that to let nature take its course would be less dangerous in the long run.
There are always first time buyers in the RE market, but many are rushing to take advantage of the November 30, 2009 deadline. I read somewhere this week that Congress is considering another year of the federal tax credit.
- Owen Ahearn | Flag this comment for review