There are those who say the First Time Home Buyer’s Tax Credit has artificially boosted the market, that some in D.C. are afraid to pull the plug for fear of what may happen– an even softer market. Even more somber news: it appears that the the federal government is now securitizing 95% of U.S. home mortgages.
I’m torn. I think the credit was necessary, and not only do I think it should be extended, I think it should be expanded. Goldman Sachs, otherwise known as Government Sachs, has said it pushed up home prices by 5%. There are simply too many people who bought adjustable rate mortgages in the past few years, too many people who, if they have to sell their homes, will have to carry cash to closing. What if they don’t have it? I’ve heard that many banks are shelving some bad loans, others making deals as low as 2% interest rates just to keep folks in the home, the property off the courthouse steps.
Almost makes you want to stop paying your mortgage. But then, who said life was fair?
The housing market is a vital component of our economy, and when people move and buy homes, they tend to spend money — movers, hardware, paint, soft goods, hard goods.
As for the government propping up an industry, I have this to say: Amtrack.
Case-Shiller tells us that Dallas home prices fell at the annual rate of 1.2 % between August ‘08 and August ‘09, which is a smidgen compared to the rest of the world — double digit declines almost everywhere. Only Dallas and Denver are edging closer to positive numbers, our decline at 1.2%, Denver’s 1.9%.
Then ZipRealty (Emeryville, CA) tossed out it’s third quarter report to find this quirk: Grand Prairie, Texas emerged as one of the top ten “hot” markets in the U.S., a hot market being one where accepted offers come in higher than list price. I had no idea this was happening in Grand Prairie. Further, Texas is a non-disclosure state so I am just baffled and have emailed the company for an explanation.
Help if you are from Grand Prairie — we need a clue!
I told you two weeks ago about the upcoming auction that Drexel Development has cooked up for some Drexel Park Hollow condo units. Well, I just found this little tidbit from Curbed about another condo auction that recently took place in Boston. Industry experts tell me we are going to see a lot of real estate auctions in the next couple years, and it looks like some folks in Boston got themselves a fair deal, nothing extraordinary. (Or maybe these units just sell at more realistic prices, which makes you wonder why the developers don’t just slash and reduce.) But remember, the developer usually reserves the right to a “reserve” price, a bottom line threshold. As one agent told me, the nice thing about auctions for the developer is they get all pre-qualified buyers, so no tire kickers wasting anyone’s time.