Gov. Arnold Schwarzenegger proposed this morning the adoption of a new [first-time] homebuyer tax credit for California taxpayers.
Unlike the previous tax credit, which was depleted eight months before the deadline, the latest proposal would apply to the purchase of existing as well as new homes.
At a certain point, you'd be crazy not to grab your share of all the free ponies. Hell, we're all going to pay for it anyway...might as well try to benefit your family's situation.
Look at it this way; for a $400,000 property:
$10,000 (pony from the State)
$8,000 (pony from the Feds)
-$14,000 down payment (FHA)
____________________________
+$4,000
The government would literally be paying you to purchase a house.
And considering you don't have to put anything down, it will create the perfect "put option." If you find yourself horrendously underwater or you lose your job, you have the option to just walk away in a heartbeat and soak the taxpayers for any losses. What a country!
I'll be watching this VERY carefully.
Hey, I thought the state was broke.
ReplyDeleteAnyway, isn't the inventory shrinking (or already shrunk)? If so, why the need for a new (expensive)stimulus?
All this Gov't 3-card Monty is makin it really hard to stay on the wagon.
"All this Gov't 3-card Monty is makin it really hard to stay on the wagon."
ReplyDeleteWell said.
Maybe the MLS inventory is "shrinking", but there's a bazillion homes in "Shadow Inventory" that aren't listed.
ReplyDeleteCheck out the "Dr.Housing Bubble" blog for some insight on what crazy games are being played these days.
Only one problem with this El-Bee: The fed program I thought was supposed to end at the end of April? (but you would have to June to close)..go figure.
ReplyDeleteThe state is supposed to be from May through Aug.
Doesn't seem that you can combine both..but give them time to straighten that out.
JK, I'd be shocked if the Feds didn't extend the FTHB pony again, but that is a very good point.
ReplyDeleteFrom CalculateRisk:
ReplyDeleteProponents of the $8,000 credit for first-time buyers and the $6,500 credit for move-up buyers made it clear during the debate on Capitol Hill that the benefits would not be renewed when they expire. And a lobbyist for the National Assn. of Realtors confirmed that at the group's annual convention last month.
Lawmakers "made us promise practically in blood that we would not come back" for another extension, Linda Goold, the Realtor group's director of tax policy, told her members.
During the debate, Sen. Johnny Isakson (R-Ga.), a former real estate broker and a longtime proponent of the tax credit, promised his colleagues, "This is the last extension."
http://www.latimes.com/business/la-fi-lew27-2009dec27,0,7521446.story
DrJim,
ReplyDeleteYep, well aware of the Shadow situation, was being a little facitious....
I found a very to the point comment over at Calc Risk..
If the housing market is dependent on subsidized lending via Gov purchases (and DP assist), then it means the housing market is too high."