I'm just surprised this hasn't already been done.
It will be.
Soon.
And when it is enacted, along with 4% 40 year loans for everyone, that will be it. That day.
The housing bottom will be in.
Cramer: Obama Must Address Housing Problem
If Obama does not attack this issue square on with twin initiatives to sop up inventory with a one-time tax credit of $25,000, enough basically to get a new homeowner off the sidelines to buy a $200,000 house (where the average price is headed), then the banks will continue to default, and the problem will never end. Plus, the wealth effect will continue to diminish because the stock side and job side of the ledger are so bad
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54 comments:
Jailing Cramer would be an excellent start for the Obama trials to come.
Let's stop the madness and move onto reality.
$25K credits are no longer reality.
Savers have been punished enough already.
or I vote for $25K write down on my mortgage balance
or I vote for 12% interest on my savings.
How does that grab you?
The something-for-nothings like Cramer are obsolete.
Back to your crack pipe Cramer.
Will that be enough? I mean, that is still not enough to get me to buy a 200,000$ condo that went for 50k back in 1998.
/DC area.
Would this be just on primary residence or could I buy an investment house/vacay home with this?
Kind of make you feel like a putz if you paid off you
Jersey Girl
I'm just waiting for it. No more Mr. Nice Guy from me, as I'll embark on any bubble/fraud this gov offers me. Can't wait for the welfare freebies coming up from the comrades at the White House and Congress.
Oh, and one more thing, as I predicted weeks back: Huge stock market nosedive as soon as Obama was sworn in. As you can see, it's happening today as clockwork.
Folks, IT'S ALL RIGGED!
OK so we would get this huge tax credit to buy a house-But where would the money come from to fund this credit--From higher taxes!
It matters little what the easy deal on home buying is if you have no job. Even small payments on a home require an earned income to meet them. This job loss thing is also greed and fear of losses by the employers. True, some small employers just could not make it anylonger, but lots of bigger employers had no qualms about wasting lives by the pinkslip if it meant ANY reduction in their profiteering. The worst postion to be in is to make say $100K and had been there for about 15 years, so you were a great liability to the company and first blood is extracted thru you. Screw your loyalty and all the things you may have done towards the success of the business in years past. When you go, at that level, you wont find another job. If you were excessive to the former boss, the next one will not want you either. You were too fat in wages and bennies----too much of a liability, even if you were the one that made the company. Its all about job loss. No job--no house payments being made--no cars being bought--no this--no that, just despair and disdain. Sure, lower the median home price--lower it all you want to---no job---no buying. There are just too many Americans in that catagory. Middle Management? Too expensive!!
Cramers sticky note on his forehead is Bushes fault!
What do you mean Bush is no longer the President?
Hey who cares?
I am still blaming Bush for everything and will always blame Bush for everything
Old habits.
Demi Moore and Ashton Kutcher want you to Pledge Allegiance to Obama
oooooooohhhhhBamaaa,
Were is my stimulus?
Todays market ticker is a must read. It's a bit more thoughtful approach to the situation than Cramers verbal diarrhea.
http://market-ticker.denninger.net/
Cramer has lost his mind and street cred...
Bama will save the earth without Cramers help...He promised us
People need to live in trailer parks or apartments { if credit worthy } and work a real job in tradeable goods and services.
That's how an economy can turn around. Propping up this or that is just delaying the real truth and that is that the US is no longer an R&D -> global manufacturing power but a user of the global line of credit extended by China and other east Asian nations.
I'm always amazed that housing is thought of as something other than what it really is, a place to sleep in.
If you have to lure people to buy a house it simply means they are still overpriced.
It is absolutely essential that house prices stop being subsidized, propped up, and otherwise manipulated.
Let the market correct itself.
Keith,
You're such an idiot some times! You still don't even understand what caused this crisis even though you have had two blogs on the crisis. 60 trillion in worthless? It has to be defaulted. 20k tax credits will bounce off the sinking titanic like a bb.
I say, let's create a National Shanty Town act where people can live in parks, meadows, any stretch of land by the highways. Then, this will create a migrant population capable of moving anywhere for seasonal work. Then, any work will make this person well off and able to support oneself. That's when we'll have a real bottom and a place to start from because in effect, it'll be a non-ownership society but a society of worker bees.
No! No $25,000 tax credit for anything. What makes houses so special? What makes cars so special? Why are cheap houses and cars a bad thing? Are we going out of our way to make the poor even more separated from society?
This insane fiscal policy along with the Detroit bailouts are basically taking the two biggest energy hogs in society and subsidizing them. Americans should have smaller houses, smaller cars and bigger bank accounts.
We are going to be a country of people that live in big houses with inefficient cars with children whose only skills are playing football and playing in the marching band.
How 'bout we stop subsidizing roads, cars, sprawl, big box retail, construction, football and marching band and start spending that money on mass transit, bike lanes, mixed-income and pedestrian-friendly housing, efficient farming practices, reading, writing and arithmetic?
Or even better, how 'bout we just stop spending on everything and let the user/customer/student/parent decide what is best for himself.
>If you have to lure people to buy a house it simply means they are still overpriced.
What part of that doesn't diarrhea breath understand. He's supposed to be a freakin expert afterall.
This is correct it would kick the housing market right in the A** to get it going along with alot of other industries that follow housing. .......One problem, it will NEVER happen. WHY, because the fix is to simple.
I say send 25000 cash to every american.Wouldn't this stimulate the economy?
Housing is not an industry, it is a place to sleep in, a shelter.
Here are industries: Chemical (Dow, DuPont, etc), Electronics (Intel, Motorola, etc), Biotech (Genentech, Genyzme, etc), Food Stuffs (General Mills, Kraft, etc), Consumer Products (Proctor & Gamble, etc).
Ok, now that the definition of an industry is clear, how do we increase/improve our industrial base and export markets? Which in turn, generates wealth and jobs for Americans.
‘And when it is enacted, along with 4% 40 year loans for everyone, that will be it. That day.
The housing bottom will be in.’
Keefer is this really you?
So all the logic about PE and affordability out the window?
Is it the air in Europe?
So can I buy a house in Detroit, and pocket $10k in profit on that tax credit?
Does anyone still listen to Cramer?
Back to housing, people piss and moan about overpaying for housing that lasts forever but will spend 50k on a car that lasts 5 years and brag about that sweet ride.
Oh by the way, the democratic congress destroyed the economy.
I'm a realist. I'm not for or against this. I'm just telling you how it is.
$25,000 and 4% loans, and I'm out buying houses (that have positive cash flow).
You'd be a fool not to.
That said, I'd say the chances of this happening are about 15%. It's a big, BIG move.
If the government doesn't do this, then Greater Depression ahead.
If they do do this, immediate crisis over, but a nightmare down the road.
Get popcorn.
And watch the banks fail, right on schedule, as well:
NEW YORK (MarketWatch)-- U.S. financial stocks fell sharply and matched their biggest percentage decline ever Tuesday as investors panicked at the likelihood that there is no end in sight for the sector's need for capital, and no easy way to raise it.
This is correct it would kick the housing market right in the A** to get it going along with alot of other industries that follow housing. .......One problem, it will NEVER happen. WHY, because the fix is to simple.
You lend somebody 25,000 to buy a house he or she can't afford. That way when they default it's your loss. This is all cartoon shit. The day of monopoly money is done. Funny money and a cartoon economy got us here. It will not get us out. The moneychangers kept stealing and stealing until they got it all. They then turned to their bitches, the politicos and demanded they plunder our future and our childrens future. That is done. We are all done. Hang the moneychangers and their bitches, NOW!!!!!!!!!!!!!!!!!!!!!!!!
I'm just saying
A one-time $25K tax credit is not really enough to get me off the sidelines as home prices in my area (metro ny) are still a little high. I'm not willing to take on the debt just to own a house. If they let the market hit bottom without all this effort to prop it up - money will move again - people will move again. It will make economic sense to move.
Makes sense to me--you've gotta trick the few remaining holdouts into surrendering their cash. How else can we keep this POS afloat?
::Makes sense to me--you've gotta trick the few remaining holdouts into surrendering their cash
Bingo! Because as time goes by, a lot of people on the side will stop believing in RE as an investment but as a depreciating albatross and that would be the death knell for housing.
In other words, Japan 1991-2000, but for a debt ridden society.
We moved to Lancaster PA back in 2006 and there were some new townhomes right near the local university (Millersville) going for high 80s, then. Thought about buying one for an investment, but the price kept going up...
Well, I drove by today and they are building the "final phase" and I thought maybe there would be deals for student rentals.
Current asking price: mid-100s.
What gives?
A one-time $25K tax credit is not really enough to get me off the sidelines as home prices in my area (metro ny) are still a little high.
Silly obamanoids. The main idea of the tax credit was for smart people to adjust tax withholding, as in "not paying federal taxes on your paycheck for the entire 2008". This way you could have saved money earlier, without having to pay anything when filing on April (perhaps even getting a refund).
I saw it coming and took advantage of this communist freebie, while sticking to the obamanoids. Let them pay for my taxes and housing. I was happy already with the initial $7,500 credit, but Keith is right, there will much more coming. Pelosi, Barney Frank, and Obama can't wait to give more welfare paid by you. I can't wait.
"keith said...
I'm a realist. I'm not for or against this. I'm just telling you how it is.
$25,000 and 4% loans, and I'm out buying houses (that have positive cash flow)."
You claim to be a smart guy along with part-time traveling blogger. Where would these 'positive cash flow' houses be located and who would you rent them to?
Have you ever owned anything real like bricks and mortar in the US or just Apple stock? Do you have any clues as to how rental real estate works?
The tide is out and I think you are being exposed. Better quit while you can and save face.
Just a thought. or take another trip somewhere...
"A one-time $25K tax credit is not really enough to get me off the sidelines as home prices in my area (metro ny) are still a little high"
Given the sheer number of layoffs, I think I'd rather keep my downpayment in the bank to get between jobs, if I'm forced to move/re-located.
I was just offered a loan modification by my lender IndyMac. Everyone i've showed it to says it is the most aggressive one they have seen to date. They have offered me 2.375 fixed for 5 years then in 2014, the rate goes to 4.375% and stays there for the remainder of the loan. it is also a 40 yr. loan. No money upfront, back pmts get put on the end of the loan and i don't start making pmts again until 3/1/09. I haven't made a pmt. since 8/1/09. Currently filing for BK and was undecided on keeping the house since i'm about 150k underwater with a ARM and HELOC. Did my loan full doc when i puchased it but then was laid off 3 years later and now found employment that is 1/3 less what i used to make. I live in California, work in the mortgage industry and am going to totally take this deal.
Given the sheer number of layoffs, I think I'd rather keep my downpayment in the bank to get between jobs, if I'm forced to move/re-located.
Layoffs don't matter anymore, as you can always negotiate your mortgage or credit card debt with banks now. It's a Democratic administration now, focused in welfare and giveaways, paid by the employed people. I'll join in and get my credit and buy a home, since an Obama mortgage of 30 years @ 4%, can even be paid with the upcoming 24 months unemployment checks.
Bush is at it again.
Blabbing away in Midland.
On MSNBC.
OMG.
HE CAN'T STAND TO NOT BE IN THE SPOTLIGHT ANYMORE.
Will he just start some pathetic radio talk show..?
And you wonder why so many of us hate Cramer?
This is a terrible idea for the following reasons:
1) only homeowners benefit because this just raises all offers by $25k
2) it still punishes the prudent because it is paid for with their tax dollars
3) it will not work in many areas as they are more than $25k overpriced.
I live in Boston and will still not be buying.
"casey said...
I say send 25000 cash to every american.Wouldn't this stimulate the economy?"
I say send $100K! Screw it, why not send a million.
1. It would solve the debt problem.
2. Anybody with any sense would be out spending the money like a drunk sailor, so retail would do OK and even Circuit City might pull out of bankruptcy. The auto industry would sell cars like there's no tomorrow...
3. House prices would sky rocket again.
Given, the cost would be 300 trillion but we could simply print up the money and the gravy train would be under full steam once again. What could possibly go wrong?
Government intervention into the free marketplace is the main problem. Our economy is in shambles. Housing bubble deflation is a symptom of a society that lives way beyond it's means. What happens if the government gives the one time $25,000 credit but the overall economy is falling apart? Also, once the government subsidy is withdrawn, then the market collapses because it was an artificial stimulant.
Why can't our countrymen live below their means? Why can't they just buy what they can afford? And do away with all of the extraneous unnecessary material objects? ($6 lattes from Starbucks, a large flat panel tv, etc...).
"I live in Boston and will still not be buying."
It might be a good idea to never buy in Boston. There's been nothing but corporate exodus, from that area, even during the housing run up... Gillette, Fidelity, and soon State St.
I'm not going for a mere $25k, I'll wait for the $50k next year.
Keith, Jesus. I love you, buddy, but you gotta avoid these knee-jerk reactions. A $25k tax credit won't mean a bottom in housing. Prices aren't going to bottom until they are affordable. It's the easiest thing in the world to understand, and you have to resist all the little distractions that might make you think otherwise.
Of course these free-lunch stimulus plans only succeed in prolonging the recession. If it happens I will certainly look at houses, but the reality of such a plan may kill it before it comes online. Something for nothing will not work. The economy did not turn around for real during the Clinton admin until there was a perception that government and the private sector were solvent.
But Mr. Obama sur, I donts pay no incum tax! Can I jest gets me a big ol' check anyhoo?
It's only fair, yessir. Dem white devils OWE me!
yeah.. i will buy one when it falls to the same level as the BAC stock has done..90 percent plus from the high... but without banks loaning, thats the price that is received,
incentives, incentives!
That's all the American people need to get off the sidelines and back into the game!
Free pizza with the purchase of this new home!
Free blow jobs from the frizzy-haired real estate agent when you buy this home with the granite countertops!
25,000 you can use to offset the commissions, closing costs and price that will now not adjust to market levels because everybody will think it's a good deal.
Is this idea anymore out-there than what people were thinking during the boom?
"Um, I'd say your house is worth....wait....um 500 thousand!"
"Woo hoo. Now I can buy that big boat with the extra 25,000 tax break I'm going to get and I'll have instant equity since the prices of all the other places are going up too"
I say, we burn cramer at the stake followed by:
1. put next name here. (somebody other than Madoff plz.)
2. etc.
what about shareholder lawsuits about government forcing banks to lend to people who could not afford to borrow, and as a way to get the true information about exec payouts, board briberys in mergers and buyouts, and derivitive compensations? and locational and service values........?
in the depression 25,000 bought a mansion and farm belonging to many an industrialist
Sombody tell me again where does all this money come from?
And if we already have this money, then why didn't we just spend it in the first place?
Why is it that there's only money when there is a crisis?
Couldn't we have avoided all this if we had just given everybody all this money while the times were still good?
Sorry but 25K is a drop in the bucket in the Metro D.C. Market - won't make me buy at all!!!
Wake me up when they're giving us 100K towards the 700K house I want.
Or if we're going to do this then let's at least be honest about it.
If they are honest, they will make it a $25k tax credit to all home sellers.
Instead of propping up the price of houses, this will encourage sellers to take lower offers and it will speed up the natural process of falling home prices.
That measley 25k isnt going to be enough to get people purchasing homes again. Neither is a 40 yr loan. No bargains there.
Homes could easily lose that gift of 25k equity at closing. All it takes is a comp coming in lower than your purchase price...making that lower price "the price" for all houses in a two block range.
When buyers could easily buy homes with cash or, 30-40% down, thats when we'll see an end to this downturn.
"then the banks will continue to default, and the problem will never end."
Why would I want the problem to come to an end? I want it to get worse.
That measley 25k isnt going to be enough to get people purchasing homes again. Neither is a 40 yr loan. No bargains there.
Why not? Brand new homes in Florida are selling for $100k. If you add some more money down on top of 25k credit, a $70k mortgage for 30 years @ 4% is only $300 per month.
When Obama, Pelosi, and Barney Frank announce this socialist deal, I'll be buying with both fists. We'll take 2 and rent them to the same obamanoids who helped to pay for all the credits, interest deduction, etc. I love socialism.
Sombody tell me again where does all this money come from?
From your Messiah's magic teleprompter
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