Housing Tax Credit was like a Painkiller…Posted on 29 Jul, 2010 by admin According to a CNN Money article, “The tax credit was like a painkiller for the housing market, but we’ll have to go into surgery to deal with the underlying problems…”
I certainly can’t speak for the rest of you, but surgery isn’t exactly a fun experience. The housing market has taken it’s bumps and bruises, broken bones, etc., but the bandages have to be addressed properly, not just put on tighter. With any injury, if you’re following the proper treatment procedures, you should follow the RICE method. Rest, Ice, Compression, Elevation…
What does this mean as translation for the housing market? How about TIRE – (T) Tax Credits for Buyers to stimulate offers, (I) Inventory Reduction, (R) Regulation of the banks to accept reasonable offers on properties, (E) Expedition of these submitted offers.
There are many problems within the system, each having a different solution. Buyers are backing out of deals because of the lengthy timeline, and because there is so much inventory on the market, they can find a new property that may not need to be approved. Offering continued tax credits to buyers will offer incentives for them to continue purchasing, it’s proven that this solution worked. Temporary regulation of the lenders to approve reasonable offers, and expediting the process will correct the tumbling housing market.
Until the time where this TIRE method comes to light, the market shifts, and property values continue to rise, we will see a very slow recovery to this housing market crisis. If property values continue to dip as they have, and homeowners owe more than their house is worth, anytime they want or need to sell within the next 10-15 years, depending on the market, it will be a Short Sale.
It would be a shame if the real estate market was still in a cycle 15 years from now, where the term “Short Sale” was as popular as it’s become today. That would simply mean, that bandage was just put on way too tight!
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