Is there anyone out there who doesn’t believe that the housing market has been the driving factor behind our current economic situation? I mean, anyone other than our members of Congress?
The news has gotten somewhat better as today has worn on, at least from the snippets I heard while driving through the Imperial Valley on the way to Anaheim and what I’m seeing right now on CNN.
At one point today it appeared that part of the negotiations between the House and Senate on the Economic Stimulus Bill … I heard a new name somewhere outside Indio but it since has faded from memory (as has Indio) … the $15,000 home buyers tax credit had been dropped from the package.
Now, according to Senator Susan Collins of Maine (one of three Republicans who voted in favor of the bill in the Senate), the tax credit still is part of the package but, says CNN, is “significantly reduced.”
Frankly, anything is better than the $7,500 non-credit credit from last year (which really amounted to an interest-free loan and not an actual credit.) Was $15,000 too much? If you are against any sort of government intervention, of course. If not, then maybe.
Whatever the final number turns out to be, something needs to be done to cause the latent buyer demand to rise to the surface. And if you don’t think this latent demand exists, you aren’t paying attention.
There are buyers, even here in the Phoenix real estate market where I have more than a half-dozen scheduled to arrive in the next couple of week … they want specific types of properties (read: bank owned homes) and they have varied backgrounds (primarily first-time home buyers, Canadians and some bottom-seeking investors) but they do in fact exist.
If the tax credit retains its original form if not amount – applicable only for purchases of a primary residence and obviously inaccessible to our wonderful foreign neighbors to the north – it could be enough incentive for someone debating between now and next year to decide in favor of this year.
Here’s where Phoenix real estate gets local – inventory hasn’t changed a great deal over the past year or so (more statistics to come when I don’t have a date with a certain Mouse in the Magic Kingdom) and sales figures through Q4 2008 were well ahead of the same quarter of 2007.
There’s been a not-so-subtle shift from non-REO to REO properties as the dominant part of the market but it’s the REO properties selling at a 2-to-1 rate compared to non-REO homes (based on single family detached homes in Maricopa County, as you can see here every Tuesday or Wednesday in the inventory update.)
(And since someone recently asked, REO stands for Real Estate Owned which is how lenders classify the properties they own.)
Personally, I’m not a big fan of a nine-figure price tag but if we’re going to be saddled with it anyway – all we’re hearing is something has to be done, right or wrong – we ought to at least attempt to address the industry that brought us to where we are right now.
Postscript: As Jay Thompson reports, Reuters also is reporting that the tax credit lives on in reduced form though as with everything out there it’s unclear whether it’s a real credit or the pseudo credit from last year.
[tags]Phoenix real estate, Economic Stimulus Bill[/tags]