Word: buyer
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Dates: during 2000-2009
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...first-time-home-buyer tax credit that's been helping juice the housing market is set to expire on Nov. 30. A lot of people don't want to see that happen. Since some of those people are in Congress, there's a decent chance the credit will be extended into 2010. Among the bills floating about are ones that would grow the amount to $15,000 and make all home buyers - not just those who haven't owned before - eligible. One policy-analysis shop puts the odds of some extension at 2 to 1, despite a cost that could...
...does the home-buyer tax credit persist? First, because of fear. Falling house prices, necessary though they were, triggered a lot of the mess we're in, and the thought of quashing a nascent recovery naturally leads to thoughts of another round of repercussions. Home sales have been growing for months, but a one-time pullback - like the one we saw in August - can still send chills down spines...
...Worse yet, by extending the home-buyer tax credit, especially to existing homeowners, we run the risk of creating a situation where it never goes away. If a tax credit - or any other economic benefit - sticks around long enough, people start feeling entitled to it, even if it was originally supposed to be temporary. In academic literature this is called the endowment effect. Taking away such a program once it's ingrained can be a monumental political challenge. It's not just that expanding the home-buyer tax credit would cost $50 billion to $100 billion this year...
...didn't ordinary homeowners get greedy too? That's a completely a diversionary tactic- how greedy can you get that you'd want a roof over you head? The FBI has said that 80% of mortgage fraud has been instituted by banks, not the people, not the home buyer; that's an FBI's statistic. The No. 1 cause of bankruptcies is medical bills. The mass media has done a pretty good job of placing blame on lower income people. For two hours this week I'm going to give the other side and here's the other side...
...bubble. But some analysts worry that low interest rates, high liquidity and a tight supply of new apartments could fuel irrational exuberance. Churchouse says: "I could easily see this market developing into a bubble, but it's not a bubble yet." That should be of some comfort for the buyer who just paid $3.16 million for a 590 sq. ft. apartment...