Acknowledging the obvious...

[Anonymous]

...is this report:

http://www.calculatedriskblog.com/2010/06/case-shiller-house-prices-increase-in.html

which more or less confirms that those who rushed to purchase a home in order to obtain the federal tax credit essentially paid prices inflated to equal the federal tax credit. I realize it may be impolitic to say "I told you so!" -- but, well, I did (and you can look it up if you're better at using the search function than I am).

What the tax credit did was entice borderline buyers into the market. Those who always would have qualified would have been there anyway. Is that a good thing? Most will be fine and happy making that mortgage payment, I'm sure. But, I'm just as sure that if somebody does a detailed study sometime down the road, (s)he'll find that first-time homebuyers in March and April 2010 have a higher default rate than average.

Please understand this in no way is meant to disparage anyone who's bought a home, and taken advantage of the credit. That was exactly its intention. Good for you! But, everyone also needs to understand the tax credit did nothing to 'stimulate' the housing market, it only just put off the day of reckoning a bit further -- till, perhaps, today. So, don't be surprised if you're 'underwater' next month on the value of your home. You probably paid too much, and may well have been able to do just as well -- at a lower price -- today, or next month, or in November on the same property. The folks who 'pocketed' the credit were the sellers.

I've certainly noticed recently that posting on the forum has diminished as the housing market has soured. It's really tough to buy a house today, apparently. Had the tax credit never existed, we might be starting to see some resurgence about now. However, I fear the credit, instead, has put off that day of reckoning to some months or a year or so down the road.

The market works, and it worked regarding the tax credit: more money was available to buyers, so prices went up. All government did was add a layer of bureaucracy to the process. It is always thus.

[Anonymous]

oldhack62,

I totally disagree with you.  My house foreclosed @ $283,000.00 bought it @ $137,000.  Intrest rate 4.97% .  Housing prices are ticking up!  I know you want to say "I told you so"  but, in some areas the makrket never did go down and in some markets it tanked.  You can't take one situation and make it do for all.  I'm sure I can go dredge up a report ( give it a week or two) and it will say the exact opposite.

Just be happy in the skin you're in!  It may not work for you but it definetly worked for some one else... Oh by the way my appraisal was still gave me over $60,000 of equity in the house.  My credit is great and it's getting better.  One thing is for sure gone are the days when you only had to breath to get financing!

Continue to have a great day.

[Anonymous]

Well, good for you, and congratulations! (I suspect you read right over that part that said I didn't mean to disparage anyone, thinking I didn't really mean it!)

As noted, most recent home-buyers will do just fine, and it looks like you're one of them. So, you're not so much disagreeing with me, as providing a positive example,

 I'm just suggesting there will be a larger-than-average number of recent buyers who won't.

.

[Mark_in_Pasadena]

---

@Anonymous wrote:

Well, good for you, and congratulations! (I suspect you read right over that part that said I didn't mean to disparage anyone, thinking I didn't really mean it!)

As noted, most recent home-buyers will do just fine, and it looks like you're one of them. So, you're not so much disagreeing with me, as providing a positive example,

 I'm just suggesting there will be a larger-than-average number of recent buyers who won't.

.

---

You're absolutely correct.  The government's ill efforts to prevent housing prices from correcting themselves to fundamental levels have fooled some people into thinking we've reached a bottom.  They couldn't be more wrong, but they can't listen to reason because they're currently in this position:

[happy0510]

Hi Hack,

I don't need to agree with you (I do) it's in black & white everywhere. You can easily offer 8K less on a home now than April 30, 2010.  No doubt.

I've been in the market since February and thanks to my close eye on housing market trends, I was able to back away until the tax credit expired. Hallelujah. I saved myself A LOT of money.  You also should definitely mention the interest rates today as opposed to April 30, 2010.  They are much lower. So a combination of lower prices and lower interest rates as it stands today equals way more than 8K in savings. Going forward I see lower prices (literally in my listings).

Last, I have to tell you that this forum is for people who are in the actual process of buying their home. Most have already had their offers accepted and are finishing up financing and what not.  You are not going to get a positive response on a comment like this!! Nobody wants to admit they just threw their money down the drain for 8 thousand dollars worth of really nice furniture!!

Really Really Happy I'm waiting!!

[Anonymous]

I certainly didn't throw anything away. Many people are using the tax credit to make improvements on their new homes, many to rehab properties that were sub-par, and would have floundered on the market in perpetuity. We bought low with a very respectable interest rate, we'll eventually sell much higher, and we've managed to secure $8,000.00 toward improvements that will further increase our property value. Seems pretty smart to me.