Austin TX Real Estate - Hill Country Austin Lakeway Homes for Sale: First Time Home Buyer Tax Credit - Legislation to Extend is Bad Idea!

I would have to agree...and what sort of a sense of urgency would it create?  If it keeps getting extended no one will even be in a hurry to buy!

Deborah, It's not to create a sense of urgency. The proposal is for it to be permanent, for all 1st time home buyers.

Donna the First Time Homebuyer Tax Credit did energize things, but it has run its course and it is time to let the market be the driving force, and stop introducing artificial stimulus.

Donna, I'm with you it is time to give up the ghost.  I persoanlly think it was extended longer than it should have been.

Since it's a "done" deal, I think we should move on. Before you know it, it will be an automatic qualifying first time home buyer tax credit indefinitely for buyers who qualify. You know, they are crazy enough to pass it.

Your right Donna, that does not make sense. Only in DC!
May today bring you nothing but success!
Paul

Time for the market to stabilize IMO.

Yes it helped no doubt, we were crazy here in April, many people waited because I think they thought it would be extended again.

I could not agree with you more, it is time to just move on.

Donna:

Here we go again.  It did help to stimulate sales but I am not sure that it is such a good idea to make it a permanent fixture.  We do already have a huge deficit. Where is all of the money going to come from to pay for it? 

I know - from all of us.

I am not sure how many first time buyers are out there right now that would even take advantage of it.

I had a great fist quarter too but it got quiet after the expiration of the tax credit. I would rather have a steady business year round than a distorted market created by the credit.

Oh my, I am not surprised. I really think they just want everyone to say they "saved" the economy--even if its just a short term fix. They probably are just afraid the housing market will go into the toilet and don't want to blamed before they retire from government!

If the government would look into creating jobs, paying their deficit and other important issues the real estate market may have a chance to return to normal. 

Been there , done that ,I agree our country needs to move on !!!!!!!!!!!!!!!!!!!

Donna, I think it also has run its course. Extending it the first time took away the sense of urgency. Time to move on.

Hi Donna, we need to see the real estate market without tax credits. Mortgage rates are low and so are housing prices. That in of itself will create an urgency to buy. Our government should leave it alone!

I just love to see what the next Politician will say that makes no sense. On and on we go with the extensions. That tax credit has run its course now we need to move forward no more extensions. 

Stick a fork in it!

Makes my blood boil, Donna.  Handouts for all...and the government will be owning the people.  Government is becoming the "big brother" and "rich Uncle Sam"...except that Uncle Sam is really bankrupt (but why focus on that minor detail??!).

Looks like we will be back to where and what got us into this problem in the first place.

The real estate market has a much better chance of truly recovering with viable jobs - enough of the artificial stimulation.

I couldn't disagree more. As a short sale specialist I relish every first time buyer tax credit. These are going to be the new foreclosures as soon as we finsih with the 50% default rate on subprime especially the option arms that just started to readjust, and the 10% of prime loans in default. Give the short sale specialist a break, we need fresh meat. I hope you appreciate my tongue in cheek dialogue. Perosnally I am sick of first time buyers wanting to borrow from their family for down payment, asking the seller to pay closing cost, and then using the tax credit to buy furniture. Instead let's give them a Dave Ramsey book. 

Completely agree.  I am glad some many other people agree.  The artificial demand that has already been created and now disappeared will play enough havic on the market.

I think it's time to allow the housing market to find it's own level, and stop attempting to manipulate it.

Let's just rip that band-aid off, and be done with it.

He doesn't just want to extend the tax credit, he wants to PERMANENTLY extend it, and expand it to include those who have lost their homes due to natural disaster. This is getting to be like a bad Vegas show that nobody dares to pull the plug on...

When your right, your right Donna. Congressman Paul is one of the few fiscally responsible folks in Washington, but extending the tax credit so people *can use their own money* is nonsense.

I'll  settle for keeping capital gains at 15%, maybe even up to 20% to keep the investors in the market. If we see rates in the high 20's or low 30's, those guys will sit on their hands. The new lending requirements are hard enough, but if we take away all incentive, that will not be good. We don't need crazy speculation, but thoughtful investment has been a missing piece of the pie for the better part of two years now.

I told ya we'd get hooked on these stupid tax credits!!!!!

Isn't it enough that first time buyers have FHA, rock bottom rates and dirt cheap houses?

They don't need incentives!!!!! Hello????

Amen!  It *is* time to move on.  I'm ready for an America with a sense of responsibility and self-sufficiency.  Am I dreaming?  Probably!

I so hope it doesn't come back.  Enough - lets get to normal.  We will never get there with this. 

Donna - Janet took the words right out of my my "They don't need incentives."  Interest rates and homes prices are incentive enough and I'm just as busy now as I was during the tax credit.

Donna,

I would have to agree.  It's funny - I was just having this conversation with someone yesterday!

Good points, Donna!  I agree completely.  With all the changing legislation surrounding our industry, I would have hoped by now that our country's politicians would understand our mortgage and real estate industries better; this is proof, however, that they are once again out of touch with what's really happening and making important decisions based on false understandings.

I agree, instead of helping us come out of debt, this is only putting buyers deeper into it. We have to do a little better.

Very good post.  The tax credit (and other similar credits at the state level) were all fine to help clear old inventory and "kick start" the market.  However, sales have really picked up and putting the government deeper in debt will end up hurting the housing market more than helping it.

Instead of a tax credit we need easier financing rules for first time home buyers. These are the ones that need "special" financing. $8000 does no good if you can't get the loan.

What is wrong with a taxz credit?  There is so much corporate welfare what is wrong with the little guys getting a break.  Don't worry about the deficit!  We can just inflate our way out of it and reduct everyone's loans including the goverments!  Inflation aint so bad if you aint a money lender!

Donna, what he means is it will eliminate the grant funding which is helping people buy homes who can't afford them.

The idea is the tax credit will reward those after they purchase. Those who have the funds to do so but are "on the fence" or scared to buy. It is the lessor of two evils but not a perfect system.

I think some of these politicians are all looking for ways to be looked upon as the savior of the American economy, when in fact, no one has a clue as to how to save us.  Its interesting to hear that someone is actually thinking about dusting off the tax credit. 

I agree, we don't need any more tax credit.  The best thing the tax credit did for my business was to make "First time home buyer" a house-hold phrase.  It added all kinds of pressure on my clients to purchase, and made it more difficult to choose a home in some cases.

We need solid mortgage programs!  (and we have many already, it's true!)

What they need to create is a program that will allow first time buyers funds at closing to close on a house rather than get it later through tax return, etc.  Figure out how to make this happen and we have something useful!

So true.  The Govt needs to be most concerned about HUD, Fannie Mae, Freddie Mac surviving.  Or we will be in a worse spot. 

Looks like most of us agree with your thoughts on the tax credit Donna! Let's move on.

I am surprised to see Ron Paul being an advocate for any type of government-backed credit program.  I mean, he wants to go back to the gold standard and eliminate every form of government bureaucracy possible.  I respect several of his view points, but this is shocking.  The tax credits spurred activity in the house market.  However, it has to come to an end.  Like you said, the gov't isn't in the best financial shape right now.  Let's get legitimate consumers into the market that have their own means of buying and selling. 

I think you are and many of the comments are misinterpreting Ron Paul.  What Ron Paul means is that this program is not giving the first time home buyer the government's money, but just returning to them their own money.  According to Ron Paul, the first time home buyer is just getting back what is rightfully theirs, their own money that the government took in the form of taxes.

Where Ron Paul's argument falls apart is that why should first time home buyers have their own returned to them?  What about the rest of us?  It would not be hard to figure out how much money would be going back as a result of this program.  Take that amount, divide it by the number of tax returns and give all taxpayers some of our money back.

We were trying to get everyone in before the dead line.  If there continues to be an extension what was the point?  It should have been a one time deal. 

I find this an odd comment coming from small government, Libertarian Ron Paul.  I would say at this point we don't need another tax credit program, but not for the same reasons most on this thread have stated.  I think the tax credit was a good idea last year and carrying into this year.  But, by most accounts and economic indicators, we are starting to see the light of day.  As the economy continues to improve we will see the housing market stabilize further and sales continue to climb.  And THAT'S the reason we don't need another tax credit stimulus.  Good post and best of luck to you.

We need to become more of a "pay as you go" society.  We are bankrupting our future . . .

Very strange that Ron Paul, an avowed Libertarian, an advocate of smaller government and LESS intrusion, would advocate an extension of this plan. Very confusing. I'll have to try and find the statement on the web. maybe reading that comment in context will make more sense.

Hi Donna,  Seems kinda backward to me.  Too many in Washington trying to buy the folks back home !

Thank you for all the comments. I don't have time to respond to everyone individually, but I wanted to stress something that I think people are misunderstanding. Ron Paul has asked for this to be a "permantent" thing. That's not putting a time limit on it to where people will rush out and buy before time runs out. It will not create ups and downs as it would always be there, waiting for someone to use.

With that, I don't think it creates a false market, I just don't see where the funds are going to come from and how he plans on people to buy houses with the credit if it's given after the fact.

As for the comment about making funds available prior to closing, those are the down payment assistance programs that needed to go away! People should not be buying houses if they don't have the money to buy them! We can avoid a lot of the foreclosure and mess if people would only buy what they can afford!

Ok, off my soap box, and thanks again. Oh, and as for those printing presses, why are we in debt if they can just print money whenever?

From what I observed, not that many people were buying homes just because of the tax credit. They were buying because of low interest rates, they needed to move or one of many othere reasons. Most of them just considered the tax credit to be icing on the cake.

And I think one of the things that has gotten our country in such a sorry state is because of people becoming too reliant on government handouts instead of being self-sufficient. I am afraid a few years from now we will have another wave of foreclosures because of all the people who bought a house just to get the tax credit who will be defaulting on their mortgage.    

The tax credit was a helpful short-term subsidy to help jump-start the housing market. Further stimulus would only have a minor impact on curing housing's ills. The only medicine that will heal the housing patient is ... JOBS ... JOBS ... and more JOBS.

I think extending it could help consumers get into a home, wether they should have the responsibility of homeownership is another question. The idea of my kids - kids - kids paying off our debt is enough reason in itself to stop the madness with free money. I actually like Ron Paul, but I don't like his idea to extend the tax credit indefinitely.

Our business has actually picked up since the tax credit has ended. I say let the market correct itself.

In our market the tax credit did not make much of a difference. Many of our clients took advantage of it but it was not factor in deciding when to buy.

They've already extended the credit 700000 times as it is (ok, maybe not THAT much :) ). But I agree, you can't just pass out a credit like this forever. The goverment can't just keep 'making'money. However, it'll be interesting to read the whole statement. I know for us, the tax credit had some positive impact on business, but looking back, not as much as maybe we had crossed our fingers for.

Donna, they print money when the old money gets out of circulation. Imagine what would happen if they printed as much as they wanted. It's hard to explain. I said that to my hubby when I saw the movie, Mad Money. He explained it to me and it took me days to get it and understand. We wish it were that easy!

It is time for the housing market to move forward without a tax credit. I question the intelligence of anyone who is serious about buying and did not already take advantage of the credit(s) that have been available since 2008. Procrastination has a price and if a buyer has waited until the credit has expired they need to blame themselves and not expect Uncle Sam and all of the taxpaying nephews and nieces to pay to extend the credit.

Donna...

It's time for credits to go away and for the market to "normalize" on its own.

Yea! Yea! Yea!... no more nanny state PLEASE!!!  Those are MY (and YOUR) tax dollars.  Lest we forget the immortal words of Michael Steele on the George Stephanopolous show, "The Government has never created one single job"... that comment flew right over George's head.  The fallout from this tax credit SCHEME will be felt for the next two to three years as markets adjust based on supply and demand... also known as economics 101 ... Capitalism: the greatest creator of liberty and freedom the world has ever known...

down off my soap box now.

I had to read your quote in red many times thinking surely there must be something wrong with my brain as it wasn't making any sense, but then it dawned on me -- Washington politiicans.  What a sad commentary if this congressman is this far out to lunch.

I feel sorry for the mess my kids are going to inherit from the financial mess some in this generation have pressed down on the masses.

Hi Donna,

Mike experianced the rebate(tax credit) program while in sales in a different industry in the 80's.  But people were hooked and people stopped buying the product when the rebates were not available.  So that industry increased the rebates and their frequency, till one day the government had to bail them out also.  If the industry doesn't ring a bell think of GM and Chrysler, Ford managed to do their recovery on their own.  It's time the real estate industry including the lenders finish doing their own recovery and stop the tax credits so business can return to normal. 

Wouldn't it be interesting to see what the same $8,000 would do if applied towards stablizing the foreclosure situation?  Gee, real estate appreciation might return and America would begin to rebuild their equity.  And, we could actually educate homebuyers that buying a home is a long term financially beneficial goal.

But, no, we should "give" them the opportunity...please, let there be no challenge or perseverence involved!  Of course, we are just increasing the entitlement mindset that is so prevalent today.  Thanks, Mr. Paul, but no thanks.  We need homeowners that appreciate what they have worked for and are dedicated to keeping their home.  People who are vested and invested in their homes do not walk away when the going gets tough! 

Well said Donna! And I agree. Clearly logic has escaped our politicians when they propose these bills. Many of the politicians vote these bills through without even reading them. Furthermore, they think the American public is stupid and not paying attention. This proposal is nothing more than an effort to keep the American public beholden to the government. Come November, we have a chance to FIRE the party that is in control in the House & the Senate and replace them with people that will protect & follow the Constitution, who understand simple Economic Principles and who know the meaning of FISCAL responsability! 

Best wishes,

Matt 

I couldnt agree more, and as long as we are talking about stupid tax policy, why not end the tax deduction for mortgage interest

Right on Ron. Let's eliminate all subsidies for the average homeowner, especially when there are such large deficits. As Leona Hemsley proclaimed; "Only the little people pay taxes." The wealthy and corporations should have all the tax breaks, loopholes and preferential tax benefits. After all, they produce all the wealth.  

We really saw an uptick in activity here with the tax credit, but having permanent legislation is concerning.

Ok so he is proposing that the tax credit become permanent...........What happens the next time the market is in a slump? A new tax credit is introduced to add to the permanent one they are proposing???? Does that mean sometime in the future 1st time home buyers can get a $16,000 tax credit.....My, I want the money tree that's produces money in that quantity!!!

Much as it may seem like fun, we can't just keep printing up money to spend.  It has to end at some point.

I agree it's time to move on.  I like your thinking.

Thanks for your post.
Tom

Let's hope that the majority of our elected officials will see that permanently implementing a first time home-buyer tax credit is a very bad idea for the American people.

Donna:  You said: People should not be buying houses if they don't have the money to buy them! We can avoid a lot of the foreclosure and mess if people would only buy what they can afford!

I've sold small affordable homes to many buyers with great credit who have proven themselves to be very responsible but short of cash to buy a house.  Does this mean they should not be allowed to pursue the American Dream?  These buyers will eventually become 2nd time buyers with equity.  I mean without these buyers, I truly believe our markets would suffer further.

If lenders had been following these recently implemented guidelines, then just maybe we would have had fewer foreclosures.  I just don't think it's fair to lump everyone into one statement.  My first home was a HUD home in 1988 that I was able to purchase for about $500.00 total out of pocket and was I ever grateful.  My 2nd home we put 25% down and our 3rd home we will have about 35% down and of course spend more money.  Without that initial help, there's no telling how all this would have turned out.

Thanks.

I'm tired of helping people buy houses! I mean, as an agent, I love doing that, but as a tax payer, I don't want the government giving my tax money away to help someone get a house they couldn't get without our help. Well, maybe they could, but then let them. Unless they all want to invite me over for a bbq this weekend. Then we can talk about it.

All you have to do is listen to Paul Rand to know that he is anything but bright!!

It is time for America to wake up, Tax credits should not be givin for someone to buy a house.

If someone cannot save 3.5 percent to buy a house, then they need to keep on renting. ANd as far

as making it easy to get a loan, Well how easy do you want it. Pay your bills, save some money,

and gees ,,maybe the 25 year old has to buy a starter home, instead of the kind there parents

live in, that took them 50 years to get. bring back the 28/41 ratios, then maybe they will not be so many repos, hurting us in the long run, Tax credits or welfare, same thing, the goverment giving our money away, only to make us slaves to hand outs.  

I'll thank the Fed very much to leave my mortgage interest deduction alone!  

I don't agree with the idea of an extenstion or making the credit permanent...but when it was here, it was one heck of a party! 

I thought Ron Paul was supposed to be a Libertarian?  Doesn't that mean less government intervention rather than less?  Frankly, I am glad that the tax credit is a thing of the past...these interventions distort the market.  And it is INSANE to be spending more money when our debt level as a nation is sky high already (Hello Greece, Argentina, etc.)

Russell B, If they're that responsible, how do they not have any cash? Are they paying too much for a fancy car? Do they eat out 2, 3, 7 days a week? If they were that responsible, they would be putting something like 10% of their paycheck away for savings and that adds up...

We need to view home ownership as an earned privilege not a basic right or entitlement.  Tax credits distort the market.   Offering some incentives for the market over the past 12 months, especially in hard hit markets, probably was needed to some degree. But going forward, it is a bad idea to train the public into thinking that if they just wait, another program will come along to assist them in buying a home or forgive them for walking away from a current obligation.  U.S. car companies sent themselves into bankruptcy after years of training people to wait on rebates and incentives.  Let's keep home ownership an earned reward that encourages people to make informed decisions and weigh the consequences of the commitment. 

This would not be a wise move -- We had a lot of closings from the tax credit's but if we look at post tax credit, our numbers personally are still doing good, we have 8 pending closings right now so people are still buying.

Let's hope this does not gain momentum.