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Expand the Homebuyer Taxcredit?

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September 21, 2009 – Comments (6) | RELATED TICKERS: CRED.DL , IT

This blog from USA Today provides an argument for expanding the homebuyer tax credit.  However he lost me at:

 "The dramatic fall in home values over the past couple of years has been caused by one primary factor — an oversupply of housing."

Really? Thats the sole reason for the dramatic drop in housing prices? Gimme a break.

Opposing view: Extend, expand tax credit

6 Comments – Post Your Own

#1) On September 21, 2009 at 10:40 AM, ReadEmAnWeep (54.90) wrote:

Ya would be a huge reason for it. But, I am sure it is not the only reason.

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#2) On September 21, 2009 at 12:30 PM, lemoneater (69.98) wrote:

One contributing reason is overinflated prices to begin with in many zipcodes. Is location alone worth hundreds of thousands of dollars when a house the same size and construction quality is worth so much less somewhere else? In the past people must have answered "yes" to that question.

Another unimportant factor is that when ordinary individuals lose their jobs they put off purchasing homes if they don't own one or if they do, they may even have to quit making mortgage payments in the worse case scenario. Strange. How selfish. Don't they care about the economy?

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#3) On September 21, 2009 at 12:52 PM, davejh23 (< 20) wrote:

The dramatic fall in home values over the past couple of years has been caused by one primary factor — an oversupply of housing."

The oversupply of housing may be the primary reason that prices are down.  However, why do we have an oversupply of housing?  Builders were going crazy because people earning $20K/yr. were buying $500K homes.  There's a neighborhood near my home that's full of vacant 4K-7K square foot homes.  Every single home was built without a buyer, and the housing market tanked before they were finished.  Population growth in my area will not absorb the oversupply for 10+ years, and the demand for 4,000+ sq.ft. homes is suddenly gone.  Homes are selling for below the cost of construction, and if interest rates rise significantly any time soon these homes will be selling FAR below the cost of construction...unless we see hyperinflation and rapid wage inflation.

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#4) On September 21, 2009 at 12:52 PM, outoffocus (23.24) wrote:

lemoneater

My point exactly.  Tons of articles have been written of the past 2 years about the cause of the housing downturn.   Oversupply was not the main reason for the downturn.  The catalyst for the downturn was basically the sellers ran out of buyers at those overinflated prices.   The overinflated prices (and the pipe dream that the prices would continually rise) is what led to the oversupply of houses.  I mean if you are going to write a blog for USA Today, at the very least get your facts straight.

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#5) On September 21, 2009 at 1:06 PM, TDRH (99.52) wrote:

Personally, I believe it is a shortage of Qualified Demand.  

 

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#6) On September 21, 2009 at 1:24 PM, lemoneater (69.98) wrote:

davejh23, I think most of us have "ghost town" neighborhoods of huge brand new homes that nobody wants not too far away. At least my nearby overpriced endeavor only had 3 homes built before the funding left.

outoffocus, Modern journalistic efforts often leave much to be desired. The quality varies significantly even with name brand news services.

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