Posted on 09/02/2009 2:41:27 PM PDT by Kartographer
But housing boosters have forecast turnarounds repeatedly since the market peaked in 2006, only to be proved wrong by plunging prices. And skeptics say they're wrong again now.
They argue that a deeply indebted consumer, a weak job market, expiring incentives and rising foreclosures spell a quick end to any housing rebound.
"We're entering the phase where the homeowner has to earn his way out of this mess," said Mark Hanson, who runs a California real estate research firm. "This summer is shaping up as the gateway into the next move down."
(Excerpt) Read more at money.cnn.com ...
>> They argue that a deeply indebted consumer, a weak job market, expiring incentives and rising foreclosures spell a quick end to any housing rebound.
The wild card is Chinese with deep pockets overflowing with dollars that they fear will be worthless if they DON’T buy America.
Get it? Not “buy American”... but “buy America”. :-)
First off is Obama’s $8K rebate program which expires in Nov. It will be interesting if this money ends up being taxed as income at the end of the year. I would venture to say that most first-time home buyers eligible for the program don't have $3K lying around to pay their taxes. Then if they got a cash for clunker as well they could have a $5K tax bill.
Secondly residents are being forced by foreclosure or job loss to downsize from homes in the 2500 sqft range to 1200 sqft houses. This is showing up in the data as new home sales and builders are cranking out these smaller units. With this in mind one could argue that for most new small homes sold there may be a larger used house coming onto the market.
Housing cannot recover until we allow the market to reset. At best any foolish government scheme will simply delay the recovery. As with everything the laws of supply and demand are supreme. We cannot break the law only break ourselves upon it.
What, are they going to tear the old house down?
I think it’s a tax credit.
Looks like you are correct.
However, some states may be applying sales tax to the cash for clunkers program. It will be interesting to see if they do the same thing for the houses.
http://ptmoney.com/2009/08/28/cash-for-clunkers-tax-rules/
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