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The government's recent $8,000 cash incentive for first-time home buyers has proved even more costly for recipients than for taxpayers, according to data released Monday. Typical buyers have lost twice as much to price declines as they received from the program.
The median home value fell to about $170,000 in March from $185,000 a year earlier, according to Zillow.com. That means a buyer who closed on a house just before the tax-credit program expired in April 2010 collected $8,000 but has since lost $15,000 in value. Those who bought earlier in the program have done worse; the median price is down $20,000 from March 2009.
"The $8,000 first-time home buyers tax credit . . . has brought many new families into the housing market," the White House boasted in November 2009 upon announcing an extension and expansion of the program. Judging by sales declines since, that seems beyond doubt. Over the past year, the pace of existing home sales has fallen more than 6% and that of new home sales has fallen 22%.
Another thing: The program didn't work. We squandered taxpayer cash, increased the debt and lured many Americans into losses. We're deeply sorry. We'll try not to repeat the mistake. If anything, in light of America's daunting fiscal challenges, we're going to consider sun-setting costly, existing programs that lure house buyers, like the mortgage interest deduction and capital gains exemption, which together are more than 10 times as expensive as the expired tax credit program, costing about $1,200 per household last year alone."
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On top of this all the IRS was not prepared to handle the tax credit when the time arrived to file for it... Many people requesting the $ 8 K credit were trying to commit fraud and the $ 8 K is mostly used to pay off other bills and not coming into the economy any time soon since it was already spend to buy stuff...another "great" job of Obama and his waste spending advisers!
It depends on where you live. People in my area who used the incentive haven't lost anything as home values have either stayed steady or have actually risen. So it is actually not a disaster as Obama haters think.
This would only matter if you planned to flip the house. If you actually wanted to stay and live in it you should be fine. Barring the apocalypse of course. But then, I'd believe you'd have more concerns than the value of your house.
It depends on where you live. People in my area who used the incentive haven't lost anything as home values have either stayed steady or have actually risen. So it is actually not a disaster as Obama haters think.
Except that this lottery-like program, along with cash-for-clunkers, took money out of the pockets of people who bought a house or car a week or a month too soon or too late, and arbitrarily enriched those who happened to be needing a car or a house at the right time. It is not equal treatment under the law--but entirely in keeping with Obama's fundamental belief that money is merely a matter of luck.
The side-effects of both were lousy: usable vehicles were crushed, driving up prices for those at the lower end of the market and home prices were arbitrarily inflated for a spell, delaying the market mechanism that would have brought prices to the right level so that a true recovery could begin. It was middle-class welfare.
But, but....the government knows best. The government does everything better than the free market. Obama is blessed with wisdom; he didn't need any knowledge of the housing market.....
The measly tax credit suckered many into a falling market. The housing crisis is not over. There were one million homes foreclosed on last year and another million expected this year. 14% (and growing)of all homes in the United States are vacant. Even the great savior Obama cannot change the natural law of supply and demand.
Many Obomabot zombies have convinced themselves that although U.S. home values have fallen nearly 7 trillion dollars since 2007, their home is going up in value.
Hmmm, worked for me and guess what my home value did not go down. Maybe those buyers should have been a bit smarter when finding out what their home was really worth before buying. I do not see how one has anyhing to do with the other.
Casper
Hmmm, worked for me and guess what my home value did not go down. Maybe those buyers should have been a bit smarter when finding out what their home was really worth before buying. I do not see how one has anyhing to do with the other.
Casper
Connecting the dots is really not difficult. The government created a false 2nd real estate bubble. Just as in the costly "cash for clunkers", it created a demand that didn't exists by offering a financial incentive to seemingly reward a certain behavior it wished to elicit, exactly when it wished to elicit it.
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