Something got me thinking yesterday, it's all about the tax credits. Yes, they have been so wildly successful that they have caused inventory shortages all across the country.
Qualifying First time buyers (and now move up buyers with the expansion,) are so wanting their fingers on that up to $8000 credit that they are gobbling up that foreclosure inventory as quickly as it is released on the market!
Now, I was hoping that they would put the buyer tax credit to rest (at least for a while) so that some of these areas (like the Las Vegas - Henderson - North Las Vegas) areas have some time to grow and recapture that inventory for buyers.
Here are my thoughts - areas that are hard hit (like the Las Vegas Area) are attracting buyers just because of pricing alone! I have seen some neighborhoods - subdivisions - communities that are sporting SUB 1990 pricing. This alone, sparks activity and interest from first time buyers, move up buyers, second & vacation home buyers and buy and hold or buy and flip investors.
Now while our inventory is being gobbled up at a record pace: strategic defaults, short sales, deed-in-lieu of foreclosures and foreclosure sales are continuing to rise.
We cannot see stability until the above problem is nipped in the bud!
Why not give underwater homeowners a tax credit for staying in their upside down mortgages? Hello?!?! McFly?!?! Bueller?!?! Anyone?!?! With economic conditions going they way they are (unemployment UP, wages DOWN, energy costs UP, house upsideDOWN,) why not reward those that stay rather than penalize those that stay?!?! This could help take care of some "deferred maintenance" issues or part of that overpriced house payment on a real distressed homeowner and take the whole "strategic mindset, how can I buy my home back at half price?" mentality. Stopping the defaults, in my mind, this could be the ONLY way to stabilize the market.
If we are going to throw money at the problem, might as well put it in the hands of homeowners who are thinking about defaulting, just because they can!
(Sorry about the rant! In reality, I am a libertarian and wish that we wouldn't be throwing money at the problem at all. If we have the mindset that money must be thrown at the problem, why not throw it at the problem so it STOPS. Oh wait, we are talking about our government here, they need to appease the lobbyists and not the electorate to solve the problem!)