Jay, who has lived in the Waukesha area for over 20 years, is an active volunteer who has served on numerous local boards and committees. He's married to Colleen with three kids having gone through the Waukesha schools. He is the VP of a local distribution company.
It just has to be another bad dream....
The Federal Government offers a new $8,000 tax credit for first-time homebuyers. On the surface - this should, along with low interest rates, stimulate sales volume. More buyers will be able to afford the purchase of a new home. Furniture, home remodeling, and home repair stores and trades will find new business and this is, I believe the intent of the Stimulus Plan - Hooray!!
And then the bad dream sets in....
My daughter is a searching First-Time Home Buyer. Single, Kelly makes a decent wage at a local insurance company. However, being single and with only her income to depend on, she is limited by the "Sell" price of whatever home she chooses. Literally, a $5,000 difference above her "max" could be a deal-killer for her.
Bad Dream Time....Some of the realtors she is working with told her that as soon as the Stimulus Plan looked as if it would go through ($8,000 tax credit; good through end of 2009; does not have to be re-paid), many of their listings have called and want to "raise their listing prices". Now I understand the difference between the motives of buyers (Low Price) and sellers (Top Price). However everyone should take a breath and pause... and give this a thorough thinking-through.
Raise prices and the gap between sell price and affordability remains "as is". The prior First-Time Homebuyer credit was $7,500, and it needed to be repaid interest-free over 15 years. Even that incentive was not driving home sales I honestly understand this current economy, and if selling, I would want and probably need "best-buck" for my home. But read any and all publications, and current homes that sell are averaging - that's right - averaging 9.9% below assessed values!
So back to my Bad Dream - This is my first-hand experience with the new stimulus plan, but unless realtors (and sellers) can understand the down-side of a sudden increase in sell prices - this aspect of the Stimulus Plan is doomed! Those who were capable of buying will still buy, but there won't be any new buyers. In fact, raise prices and there will be fewer home sales...
And there are so many of us hoping and needing the success of this Stimulus Package. We've mortgaged our grandchildren's futures with the costs of this plan.
Please don't let my bad dream become reality.