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Barry Bonds and the $8,000 Homebuyer Tax Credit

Barry Bonds and the $8,000 Homebuyer Tax Credit

As I was playing a 2004 San Francisco Giants game on my tabletop baseball game and intentionally walking Barry Bonds over and over, I couldn’t help but remember all the furor in baseball circles surrounding the intentional walk.

For those that don’t recall, Barry Bonds was walked intentionally more than 100 times – more often than most players walk in general – and finished with more than 230 walks. Pundits around baseball, ESPN and elsewhere in the 24-hour sports news cycle miasma spent hours upon hours discussing ways of discouraging teams from intentionally walking Barry Bonds – ideas ranging from banning the intentional walk to making it more punitive (truly silly ideas such as giving a player two bases the second time he’s intentionally walked, etc.) to, well, I don’t even remember most of the rest of the half-baked ideas.

The larger point was all of this was a severe overreaction to a once-in-a-generation phenomenon … the greatest slugger of all time, chemically enhanced or no, playing on a team with sufficient number of average teammates that opponents feared no one other than Barry Bonds. Baseball self corrects. Does anyone recall how many times Roger Maris was walked intentionally when he set the then-single season home run record in 1961? (Answer later – that’s known in the biz as a tease.)

Housing policy and the real estate market in general seems to follow the same pattern of overreaction. Sales have fallen off since the $8,000 homebuyer tax credit expired in the spring; those like me who continually argued that the credit wasn’t good policy and, further, an $8,000 tax credit was a silly reason to spend six figures on a piece of property, found their arguments falling on deaf ears.

Likewise, the lack of an $8,000 tax credit is a silly reason not to purchase a home in an environment of ludicrously low interest rates and prices from several years ago. Yet many buyers have surrendered the ghost because the tax credit isn’t there. Maybe they were buying only for the $8,000 or maybe they are hoping in vain that the tax credit may return.

Enter the utter silliness that is Washington D.C. There are rumbles that if nothing else changes with the economy, Congress in an effort to save their collective … er … seats might bring back the tax credit to spur the economy. No matter that the tax credit cost the country more than $1 billion in its previous incarnation, there are political chits to be had by protecting the current majority and, more specifically, holding the power that comes from winning a Congressional seat.

If anything, these rumors are more damaging to the real estate market than anything else because they provide false hope (or at least, what sane people who don’t want to see the credit return consider to be false hope) that the credit will return. And who is going to purchase now when there’s a chance, no matter how slight, that there will be cash to be had sometime before the election.

Hopefully this idea will die a quick death, forcing buyers to face the real estate market as it is, not as it once was or they wish it to be. Because outside of the tax credit, little has changed between now and April except prices in some areas and interest rates both have continued to slide. It needs to die. As baseball fans can attest now that Barry Bonds is retired, making a sweeping change to correct a very, very narrow problem is a very bad plan.

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