We are racing toward the sunset of the 2009 homebuyer tax credit program. Most of our first timer homebuyers are “safely” under contract awaiting inspections, appraisals and loan approvals prior to their November closings, so it’s appropriate to ask whether the government spent our $12 billion wisely, or was it plugging the dike with a TARP-like finger? Did the first time homebuyer tax credit actually do something to stimulate a failing economy $8,000 at a time?
When the program was announced in February, spending money for anything other than bare necessities was unthinkable and real estate was six feet underground. It took people several months to understand that there could be money to be made simply by moving into homeownership, and by July future young homebuyers began poking around with an increasing sense of urgency to close on their first place.
Now, with the deadline approaching, November will be a banner month for most real estate practitioners within every area of the industry. For REALTORs, the heavy lifting is completed and the administrative tasks of negotiating inspection issues, monitoring deadlines and assuring lender performance has replaced the intensive work of home touring. For other real estate professionals: title companies, inspectors, appraisers and lenders, they are working break-neck to assure November 30 closings.
But what happens on December 1st? Well, as the tax credit checks begin making their way into our new homeowners’ mailboxes, it is quite probable that the Big Boxes, like The Home Depot will explode from thousands of newly appointed home handy men and women with eight G’s burning holes in their pockets. Carpenters, electricians, roofers and a plumber named Joe will all be on backlog for their schedules will be full and money will circulate.
Back to the REALTORs, though. If an extension for the homebuyer tax credit is not granted by Congress, the real estate economy could take on a bleak tint which undoubtedly would trickle into retail sales and the construction trades. We need an extension of the program. It is imperative. This has been the one bright light of the government’s attempt to right our economy that has actually worked. By putting dollars into the hands of people who actually circulate the money, everyone benefits. It is uncertain whether the programs for bailing out the banking and auto industry have accomplished as much.
-Dave Perlowski, GRI
Posted by: Dave Perlowski
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