Will extending the Tax Credit set a precedent?
Many of you may be too young to remember the first time rebates were offered by the automakers. Those rebates are a part of the daily ad routine today. In today's market you can almost expect a rebate from the auto makers when buying a new car.
Some genius at some ad agency or maybe it was another genius in the automakers marketing department thought that offering a rebate would be just the thing to get people buying new cars again.
The idea did work. Auto sales began to soar with some of the really great rebates that were offered.
The down side is that the buying public, being pretty savvy as they are, stopped buying when the rebates expired.
So guess what? The automakers had to continue to offer rebates to keep the product moving. A precedent had been set. They offer rebates even now. The public expects it. The public even demands it.
Is the First Time Home Buyer Tax Credit setting the same sort of precedent?
If it is extended will a precedent have then been set that will keep many buyers out of the market when it expires again, waiting for its return?
I already have prospects waiting to see if it returns. Even some owners of existing homes are now thinking about waiting to list just in case it might have an affect on their sale if the credit is extended to existing home owners.
What do you think? Tax credit good or bad?
I"m opposed to extending the tax credit. Let the market correct itself. It has in the past. The lower prices and low interest rates still make buying a home attractive to many buyers. We have a new generation of buyers putting little money down. If the falls again in five years will they just be the next group of foreclosures?
Did you hear about the latest people that applied for the tax credit:
5 year old and IRS staffers that didn't even buy a home...it has been full of fraudlant activities. But this won't happen with the health care reform.
The problem with discounts is that people expect them then it just becomes part of the price.
We will survive in the mortgage and real estate business without the tax credit. People still get maried, still move away from home, still have children, still get divorced and still unfortunately die. All of these occurences insure that people will continue to buy or sell real estate, with or without the tax credit.