The Buyers Tax Credit

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• (August 31, 2009, 09:08:57 PM)

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[RebelBroker]

Hey All,

I just finished a "Real Estate Realities" podcast on the subject of the Home Buyers Credit. I spend time looking at whether or not it is actually a good thing or a bad thing for buyers. I have thought about this a lot and I have pretty much come down on the side of it being a bad idea. In nugget form, here is why:

- Credit steals buyers from future months.
- Artificially creates more buyers now and until program ends.
- More buyers means more competition for available homes.
- More competition means potentially higher prices - in some markets enough to offset any benefit of the credit
- Results in fewer buyers after the credit expires at a time when we are likely to see the second bubble of foreclosure properties, resulting in an even more drastic drop in prices.

For the full narrative, you can listen to the podcast. I am still uploading it as I type this. It should be available by the end of the day today (Dec. 2).

Vote in the poll to let me know what you think.

R

[Jim Erickson]

I am assuming that you are speaking about first time home buyers and not the potential buyers who can sell their home which they have lived in them 5 of the previous 8 years.

In any case, I thought that the missing piece of the bill was that it was a tax credit that could not be used for down payment.

After the 100% financing packages dropped off the face of the earth, buyers had to hunker down to start saving money before they even thought about purchasing a home. The credit did nothing for those folks.

[marrylhyn07]

I don't have an enough idea really about the tax credit for buyers that is why I did my own research and found this Filing Back Taxes. I have learned that tax credit for buyers are great. It has an advantages and also disadvantages.

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