May 3, 2010
So the deadline for the Tax Credit was last Friday. I am curious to see how the market is going to respond. I have talked to some people who feel that there are enough buyers out there that don’t seem to care about the credit. They think this is a wonderful time to buy and won’t be persuaded by $8000 or $6500. I feel that I come from a more logical approach. I would think that if anyone was in the market to buy a house, then they would have gotten off the fence to capitalize on the tax credit. I can understand people waiting if they didn’t find what they were looking for, but that raises another issue. Those people are more than likely hard to please and quite possibly may never find a home that they like. There are so many options out there. And there will continue to be more options. If those buyers decided not to pull the trigger because they felt that prices may fall further than the tax credit value; then I can see that argument. They will also have many options for the next couple years since the defaults continue to stream in and unemployment more than likely won’t change dramatically from our current 10% rate.
So, time always tells what the future holds. I predict that sales will slow up for a month or two while we work through this. The tax credit will not be extended, but I wouldn’t be surprised if the government came up with another carrot to chase. They have spent so much money on this program already and they don’t want it to become another Cash for Clunkers program. We all know how that helped us. I’m afraid that as much as the government tries to help, and I do believe their intentions are good, they need to just allow the market to work itself out. That means that it may hurt even worse for a while, but we can’t continue to throw money that we don’t have to fix a problem. We are only prolonging the inevitable each dollar we waste. What do you think?