As predicted here for months.
Here it comes.
The Please For the Love of God Buy a House Stimulus.
And yes, I think that'd do the trick. The Great Housing Crash will end IF something along this line passes. House prices won't shoot to the moon, but the inventory will start getting bought up, prices will stabilize, the banks can count up their losses, and things will settle down.
You can argue all you want, but 50% off already, positive cash flows, plus another 10% or so from the government, and the rush to physical assets to insure against future inflation and dollar destruction, and all of a sudden, homes in many markets will look like decent investments again. For anyone who has any money left to buy a home.
Stimulus: Senate's housing hopes
Lower mortgage rates, a foreclosure moratorium and more attractive tax credits to spur home buying are among possible amendments to recovery bill.
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62 comments:
I agree. Investors who saved and prepared for such a downturn would jump back in.
Is the 20K a refundable credit (as in I don't need to have 20K tax bill to receive it)? And can I get it up front to use as the down payment?
That and 4% fixed rate, and sure, I guess I might as well go buy a lame house. It would be a small one thats inexpensive to heat though.
No. Too much unemployment and uncertainty. If people are not buying a $20,000 car w/ 5-6 year financing, why would they buy a 150-250k house with 30 year financing? $20k TAX CREDIT - that would mean that almost everyone who got this would pay next to zero on their income taxes. What happens when these homes go into default?
Prices still need to fall another 20% at LEAST in NoVa (Loudoun Co)
Too many Sellers wanting 2006 prices still
Oh yeah - I want the 25K tax credit & 2.99% that I read about somewhere..
Of course, I could never sell the POS in 8-10 years cause the interest rates will be 12% again by then......
Better want to live in whatever you buy for many, many years to come..... !!!!
Ridiculous. Try as they may, NOTHING is going to prevent housing from crashing back to 1988 (yes, 1988) prices.
Then what happens in 5 to 7 years when everyone goes to sell / move up and there is no more 4% and no tax credit? This only extends the bubble. Prices are too high by other measures in many areas.
I dunno Keith, maybe in AZ of parts of CA. But in metro area NY a 'starter' home that isn't a wreck and in a decent neighborhood is still around $700,000. a 'trade up home' same area easily around $1 mil. Maybe max 10-15% down from peak.
Meanwhile, MTA commuter tickets slated to increase up to 23%, healthcare premiums up average 6-8%, bonuses much smaller, county governments calling for a 4 day work week with proportionate pay cuts or a 8% reduction in salaries across the board (announced proposal in Nassau County). Who knows if the unions will go for that but $20,000 and 4% still won't do it. Not here, anyway.
No, cause I live in DC metro where housing prices went from 200K to 600K in a few short years without an accompanying increase in wages - so, 20K ain't shit in the large scheme of things.
Additionally, in view of the fact that I have found that I do not like "international" cities where large portions of the populace are on the public dole, are illegals, do not speak the generally accepted language very well and/or do not carry themselves in accordance with the norms and customs of their host country, I really cannot see myself establishing roots here - so, I will not be buying an overpriced POS home here, but rather, will find a place where I do not need to constantly repeat my f'ing food orders.
Nope, no deal. I'm not buying until the market bottoms in 2012.
I still say let middle class America tap their 401K. Say 10-20%limit, no taxes, up to say 40K.
I am happy with what I have.
All you folks with 4,000 square foot McMansions to sell are screwed.
Regarding 401K withdrawal. Forgot to add that it's money the GOV wasn't going to see taxes from quite some time in many cases, hence no near term hit to the deficit.
No. Because my job is now in China and my wife’s job was exported last Fall to India.
If America starts having jobs for its citizens again, we may be able to afford a house. Right now, we’re pricing a cardboard box as our new home. But even this box may be out of our price range. Right now, it looks as if our unemployment may last until our Chinese overlords seize the country and put us to work in a labor camp. I sure hope that these labor camps will be ok with our American economists. Most American economists seem to be against anything which puts Americans to work.
Congrads Keefer...
Every male Realturd in America just felt it move for the first time since 2005...
Lets call this suggestion "The little blue pill for housing plan".
I paid off my mortgage and all revolving debt.
Why would I go out and buy another house.
I used to rent out a few houses, they were systematically trashed.
Why would I go out and buy another house.
Obama is bailing out his worshipers, I am sure I will be one of the people paying for it with increased taxation.
With people getting laid off in droves, why would they go out and buy a house?
Prices may have dropped, but even with a 50% drop, houses are still not affordable.
When homes drop to 3X average income, then people will start to buy again.
Obama Schumer, Dodd and Frank were the catalyst for the problems we face now by forcing banks to loan money to people who should never be closer than a mile from a mortgate, then you idiots voted them into power.
Suckers.
"...plus another 10% or so from the government..."
Therein lies the problem. Any thinking person would not want to burden an already strapped future generation with yet more debt. Aren't we in enough trouble already?
I predict it will be a hit. :)
People are too stupid to realize that anything from the government comes from the people. How often do you hear union leaches and Democrats talking about "free"? Free speech evaluations for kids, free classes, free activities at the library that a FT employee there provides...we pay for all that crap. Nothing is free.
“Would a $20,000 tax credit…get you out shopping for homes?”
-------
Need to read the fine print on this one.
- Would this apply to all homes?
- Regardless of price or the condition of the home?
- For non owner-occupied (i.e. rental)?
There’s a decrepit trailer on a ~½ acre adjacent to my property. For the right price (plus a nice tax credit) I may be willing to buy this lot, junk the trailer and replace it with a nice repo (lots of these at good prices right now). Turn it into a rental and let the tenant make the mortgage payment for me.
Yes this might work to stop the slide in house prices.
But again, it all depends on the details!
-Mammoth
Yes, but Keith, the fundamentals are the fundamentals. For example, in my local area, a nice three bedroom, two full baths and a two car garage house that is 1800 square foot sold for 630K during the bubble years (Spring 2003). Now, the bank owns it and it is sitting there because the bank wants 399K. At 399K it is still overpriced (if you take the average income and deduct all of the expenses and then add up how much you spend on housing, it would end up a whopping $2800 to $3400 per month and that is considering the person puts down 20%!). That house needs to be in a range of 220K to 250K in order for it to be considered a good deal.
For the love of God, if the government steps into the free marketplace it will just delay the inevitable and make matters much worse. It was government intervention in the first place that created this mess and now they want to add more "stimulus".
Home prices need to fall so that the average income can afford that mortgage, property tax, insurance and other related expenses of owning a house. Once that happens, then people will buy. For now, I am still on the sidelines.
I'll definitely buy a house if you can find someone to take mine.
sure it would.......if I bought after housing stopped CRASHING!!!!
why would you buy now, it is only going to crash further.
yippeeeeeeeee!!!!!!!!
Government intervention into the free market place won't resolve the problem. The problem is that home prices are overpriced in relation to incomes.
The Fed is hell bent on reviving the housing bubble. It won't work because if a buyer buys a house, even with those artificial subsidies, it still isn't affordable to own a house!And then what happens when those artificial subsidies are removed from the marketplace? If buyer A buys a home with a 4% mortgage and then wants to sell it ten years later, is the next home buyer also going to receive the special deal? I think not! Plus, how long do the monkeys in Washington think foreigners will continue to fund our lifestyle? It won't last for long.
Wouldn't do shit. Too many houses, to many job losses. I don't care how cheap something is if you don't have a job you can't buy. Plus, even at 50% off most of these places are over priced.
You can argue all you want, but 50% off alreadyI don't know what you are talking about. It's only -13.6% from the pick price in Seattle. With all future layoffs at Microsoft, Starbucks, Boeing, etc... we have a long way to go.
Stupid home debtors are still asking for their overpriced houses $450000-500000. They are just not getting that it's over. THAT'S IT! They not getting that.
We had about 4 houses sold on our street for the last 6 months. Smart investors jumped in. That was too early. Each of them is lost at least $20000 in six month according to Zillow.
Will $20000 off of an overpriced $450000 house reduce the inventory? No way! First, we have to reach the bottom. Only after that an additional $20000 will help.
You sir are insane. What is wrong with free market, where there are buyers and sellers. When the price gets to the right level, the buyer steps in. If there are no buyers, there is either too many homes or they are too expensive.
Pre-bubble real prices will stop the housing crash. On a long-term basis, low affordable housing would be a very good thing for the economy as a whole. It would let people spend less money on housing so they have more to spend elsewhere.
We should stop wasting money propping up house prices. Let them drop. Let foreclosures happen. Foreclusures take houses out of the hands of people who overpaid and/or took out loans they couldn't afford and puts them into the hands of people who saved. The prudent are rewarded and the profligate learn what risk means.
Foreclosures are expensive to enforece? Make them easier and cheaper. Allow them to kick the deadbeats out faster. Stop the foreclosure moratoriums. Increase the credit-score hit on walking away from a mortgage to make people think twice if they can afford their mortgage but just want to walk away to hang their investment loss on those who are holding their loan.
Yeah -- this will cause mortgage backed securities to plummet and credit-default-swaps to become payable. That will cause severe upheavals in the financial firms that are long in the former and who whold the liabilities for the latter. There will be bankruptcies. Some of the firms holding the CDS risk will go bankrupt and not be able to pay. Let that happen.
Use bailout money to prop up peoples savings that are held in instututions that go bankrupt. Not just FDIC-insured, but also insure (after-the-fact) the principal in as many money market funds as possible. Prioritize these by insuring the ones that a reasonable person should be able to consider safe over those that inherently carried a higher targetted risk. (Example: standard brokerage broad-based sweep funds and muni funds would get higu prioriy. A real-estate mortgage money fund would get no priority at all.)
In short, take the pain quickly, insulate the prudent, allow the profilgate to feel the most pain, let the dust settle and then rebuild.
that will be enough to begin negotiations
did I hear a free one year supply of Leinenkugel Dark and Creamy for the first 10,000 buyers????
hahahaha!
Smug Bastard
http://www.kcra.com/politics/18619826/detail.html
ruhroh
.
I'M WAITING FOR IT. I'LL TAKE 3 HOMES.
.
I think the $20k should come ONLY if both parties refuse to use a realtor
Otherwise the $20k is just paying their commissions
Anonymous said...
I am happy with what I have.
All you folks with 4,000 square foot McMansions to sell are screwed.
February 2, 2009 6:00 PM
This was the smartest thing I have heard said on here in a long while!! Bravo
yes and yes!
Whether it works or not its a bad idea. Anything that artifically props up home prices is a big mistake, and handing out $20,000 to buy a home is a big prop. All this would do is delay getting home prices back in line with incomes.
soooo,
What exactly are the Eurotards doing to make things better?
Ahh thats right.
The Eurotards are doing what they have always done.
Blame someone else.
$20,000 tax credit,
4% 30 year mortgage
and
realtors are paid in ramen
and, I'm all in.
I was going to say the same thing as posted above.
No way! That 4% fixed mortgage doesn't mean squat.
You forgot about the other critical variable linked to housing market upturn: take home income.
Americans are worried about losing their jobs. Prices in certain markets are still too high compared to real take home incomes (I cite Orange County,CA as a prime example of this ongoing, realtor-fueled ridiculousness).
Even if I have 25% down payment available in cash in the bank, is now the right time to buy a house with the personnell cuts going on all around in virtually every industry?
I'm not convinced.
And then there's that lovely bit about inflation. After this bill is passed and the printing press gets a good rub down with grease, what pre tell do you think will happen to prices for fuel, groceries, services, etc.?
I wonder.
"Ridiculous. Try as they may, NOTHING is going to prevent housing from crashing back to 1988 (yes, 1988) prices."
A year ago I would of thought this was a stretch or an unrealistic figure. But as of now I say 1988 prices might be a little generous and we might want to think further into the crash, why?
1. Because banks have a Sh@! Load of foreclosed homes on the books that are not even on the market yet and when they do watch for a fire sale like never before seen.
2. Jumbo loans are going to start defaulting in huge numbers. These are the buyers with good credit and money that still say "I am going to walk away from this upside down pig now that my stocks and 401k are later days!"
I must say we really are only at the very tiny tip of the iceberg.....
Why the rush to revive the housing bubble?
The problem is a GDP where approx. 70% is based on consumption. Many previous posters have cited that high unemployment will keep housing demand low, but what about employed citizens who have seen their pay eroded during the last decade due to global wage arbitrage. Not to mention being scared shitless at the thought they may be next to receive a tap on the shoulder and a pinkslip.
No tax credit or artificially low interest rate will cause the current 12+ month housing supply to fall...if anything, it'll grow by the end of the year, as will the number of unemployed workers/sheep.
C'mon, Keith. Quit cheerleading for Barry and start thinking this through...
I'm not in favor of reviving the housing bubble, and I don't think housing will see a bubble for the next 50 years at least. I'm simply a realist, reacting to the changing events.
That said, housing will see gains in some markets, as it gets back to the mean. It may likely have overshot in some places as foreclosures litter the landscape. We'll see. It's all about P/E and incomes, so it'll take a bit for the dust to settle. What looks like a good deal today could be a horrible deal a year from now if all the jobs go away.
But being a realist, if the government spots me $20k and gives me essentially free money, while at the same time destroying the value of that money, then you'd be a fool NOT to shop for a house. And of course, do NOT use a realtor. Why give the $20k to someone else?
And don't buy from a f*cked homedebtor. Buy from a f*cked bank or a f*cked builder, willing to take a wicked loss to get a house off their books. The homedebtors can't compete with the banks and builders right now. Their prices are still WAY too high, unless they're in short-sale.
Start looking now I'd say. And when the $20k / 4% money bomb drops, be first to get there.
If the money bomb doesn't drop, then housing keeps falling, all the banks fail, and the world spins into a Greater Depression.
Get popcorn, as always. It's getting more and more interesting (and scary) every day.
Keith,
The only statement of any type of Tax Credit in the current stimulus bill was the $7,500 for first time home buyers only. It will now not have to be paid back at $500 a year. This current credit of $7,500has been around since Oct and hasn't done a damn thing to spur any demand. I don't think we are gonna see any 20k tax credit or 4% mortgages either. Maybe 4.5 or 4.75which rates have already been at lately and still no takers.
The smart money/high income will come in to buy a few, there'll be an uptick on sales, then the crooked pundits and corrupt MSM will declare a bottom, time to buy!
Since Americans are sheeple and retarded, just the way the NWO engineered them, homebuyers will stampede to become financial slaves again. You know, like they do on Black Fridays to get cabbage patch dolls. Viva la America de Retards!
absolutely not! what do you think will happen to the value of the house when rates rise (as they eventually must)? i refuse to buy until rates are at or above their historic norm. i can't believe anyone with cash reserves would fall for this.....
You need a poll on percentage of readers that actually own or have owned real estate. This baloney about waiting to buy is just the inate fear running rampant in the weak. I can pick up a $500K house at 5% mortgage and rent it without a problem in my community. Why anyone would rather pay rent equal to house payment is beyond me.
Nope, the unemployment has not even hit the housing market. Also many ARMs left to reset.
The biggest problem is the median sale price is dropping but the asking prices are still high. Only the low priced houses are selling. Too many delusional prices out there still.
The bill as mentioned will just delay the inevitable housing collapse of another 20-30%
No way! Here in the bay area there are homes selling for 1/2 off, however they're still way overpriced. Prices need to be cut in HALF again before we reach affordability.
I've said it before, and I'll say it again....house prices have to go back to 1980's levels. Salaries are dropping, everything else has gotten more expensive so house prices must fall to accompdate higher living expenses.
Also, the banking system must be cleaned of every last bit of securitization of loans that took place 10 years or more.
Remember: we havent even begun the reset of Alt-A mortgages due thru 2011. That will help cut house prices in half again.
Then we can talk about reasonable house prices.
Another thing....buyers still have to qualify for a home. The home can't eat up more than 28% of their income. And they can't have a lot of debt on top of that to qualify.
Doesnt matter what the tax credit or interest rate would be. Its always been the about the price of the house, not what insentives are given by government to buy the house.
Its just not realistic.
If the government gave a 20K refund on home purchases we could effectively reduce homelessness in this country by having the homeless buy up all the cheap 1K to 5K homes in places like Detroit with plenty of free money left to spare. Keith on the plus side even if a realtor earned the full 6 percent on a 1K home that’s only 60 dollars a relatively low amount for the hours spent driving the homeless around.
Heavens NO.
$20,000???
Values may drop by that much each and every month this year.
4% no.
I'd rather have a bottom-feeder sale price and a higher interest rate. Especially, since rents are circling the drain now. Buyers really have to be cautious.
I haven't started shopping yet. Kind of lost the need for that fix.
Guess I've been off-the-stuff long enough to just say no.
I'll take it and buy a $1 house in Detroit. The $20k can pay for my commute by plane to a city that has jobs.
i guess i would buy some junk-yard-house for 20 -30 k. some sort of crappy ranch :) as a first - time homebuyer :)
F*ck.
I just put in a 109K bid on a 2/2, 1590sqft in Miami. the place last sold for $430K in 5/06. So that's about 25% of the bubble price. Decent place, nothing too crazy. It be really nice with about $15K of work. Right now I am paying $1400 rent for a 2/2 that's not nearly as nice. They might be able to keep the market from overshooting on the way down. Peronsally, I take whatever I can get.
Oh Lord, won't you buy me a Mercedes-Benz?
fuck yeah I would buy. I am fico 770+ with $20 down.
I deserve my bailout also since I didnt gamble back in 1996
I think another %10 drop along with the tax credit and fixed %4 rate would be a bottom
Folks, if Barney Frank and your hero Messiah gives me $7,500 credit + 4% + $1,000 deduction for property taxes (what, did you miss that?). That's $8,500 free money for the hamster taxpayer to subsidize my next house. Where I live there's brand new condo/house going for $90k. The free $8,500 from taxpayers correspond to about 10% of cost. Plus that 4% rate will be nice when all the heist we're seeing come home to roost.
Sorry guys, no more Mr. Nice Guy from me, you people are just marks now, and you'll subsidize my next investment property with your hard work. I'll behave like any Washington insider nominated by your Messiah now.
Everyone is a victim nowadays, remember? I became a member of the Messiah base, or one of the bankers or appointees who don't even pay their taxes. I'll take advantage of ANY bubble or opportunity to fleece the fellow man. This is the new America remember? Black is white, white is black, moral hazard is a joke, principles don't count any longer, illegals have more rights than citizens, politicians can't get enough hookers + cash, etc, etc. All I'm going to be saying from now on is, "I'm a victim", "I didn't know", "It was an honest mistake", "I'm a single mother", "I need to be compensated", "It's for the children", "It's for the environment"...
Count me in, crooks & parasites out there!
55% of baby boomers over 55have less than 50K saved for retirement. Some do have their houses. They are not going to be buying. Reverse mortgages? Just stay there? Probably. Or leave it to kids who can't afford one.
Or sell if they can?
Old baby boomers want smaller houses, not McMansions.
In some areas, there are 11 mos. worth of houses on the market. Some say much more than that.
People's credit card rates are being raised. A lot of people lately use cards for food - what will be the affect of raised rates? Didn't they pass a law that credit card debt can't go into bankruptcy?
Nobody has confidence
in the government or the financial system. They are starting to realize the playing and gambling that has gone on with their money. People are looking for stability and integrity.
People are cutting down on spending.
Option arms will start big-time resetting in about April.
We are never going back to 2006. Thank God.
It's over.
Big changes are in the works.
Unfortunately in the US, there is no real safety because any 14 year old could be armed, nasty and dangerous. And they are pretty common. I am not anti- gun, but I think the lack of safety is a big issue in the US. Public transpurtation? When is the last time you took a Greyhound bus?
Oh yeah, and incomes are going down. No bubble here.
I'm in escrow for a 2b 2ba condo in a good area of Vegas for 35K Cash and plan on renting it out for about 750 after HOA and Taxes. I don't give a shit if prices continue to fall...I hope they do so I can buy more.
Profoundly stupid idea that only people in government could come up with. As others have already pointed out, this would only temporarily stablize prices at best. Once the they incentives are no longer available, then one. Worse yet, this failed attempt will cost the tax payers countless billions.
Time for the Cogress to tell the NAR to go to hell!
"Otherwise the $20k is just paying their commissions"
On a $300K place. Make sure to qualify your statement. A 100K place is going to lose someone approx. 1/3 of that 20 grand.
"You need a poll on percentage of readers that actually own or have owned real estate. This baloney about waiting to buy is just the inate fear running rampant in the weak."
It's been done. Something like 75% of the readers here are renters. So whenever you peruse the content, you have to consider the source. Angry. Bitter. Losers.
And I agree with your second statement.
Houses in the Washington DC area are still too high for any token from the government.
Rasbary
http://news.yahoo.com/s/nm/20090203/bs_nm/us_usa_economy_housing_6
Pending home sales rebound.
F*ck.
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