Local Real Estate Comments and Ramblings

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New homes down,tax fraud, so what was accomplished?

New home sales have their largest drop in decades and there are a ton of fraudulaent claims on the home buyer tax credit.  So now that the tax credit is expired what was accomplished?  The tax credit artificially inflated the buyer market and we have millions of dollars in fraudulent claims.  The market is now deflating since the tax credit is gone and we are still paying the bill.  The long term solution is not gov't give aways but instead to create a strong economic climate that will create confidence and investment. Can the government create a vibrant economy?  I'm still waiting......

As Tax Credit Expires, New Home Sales Sink by Almost 1/3
RISMEDIA, June 24, 2010--(MCT)--Sales of newly built U.S. homes collapsed in May, the government said Wednesday, falling to a record low and stirring concerns among some economists that the housing...
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Treasury Inspector: Fraudulent Tax-Credit Claims Hit 4 Million
RISMEDIA, June 24, 2010--(MCT)--A government audit has found that thousands of taxpayers have fraudulently claimed the first-time home buyers' credit, and the Internal Revenue Service apparently missed them all....
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Comment balloon 3 commentsBob Southard • June 24 2010 09:06AM

Comments

I am sure there is more fraud waiting to be exposed.  Its hard to say what is the best way to have measures in place to detect it better.

Posted by Rodney Mason, FHA 203(k) & HomeStyle Renovation-AL,FL,GA,TN (On Q Financial) about 8 years ago

Bob, you are on target. Auto Dealers began a program of Rebates back in the 80's and couldn't figure out why sales dropped off right after the Rebate ended. In addition, the value of used Autos dropped significantly. The market took some time to correct itself, but we still have rebate programs.

What do we have today for housing? Artificial stimulation (Subprime/Alt A programs) to purchase new homes started in the 90s led to increased sales. Alt A/Subprime was 5% of the market before then. Those programs hit their peak of 25% of the market somewhere about 2006. The market collapses as those programs were withdrawn rapidly. The Value of Re-sales is impacted.  Foreclosures/Short Sales from Borrowers that were marginally qualified to start with increase the Supply of Resales available.

Bottom line - Supply and Demand will take quite a while to get back in balance on their own; with government intervention it takes longer.

Posted by Wharton Smith (Southeast Mortgage of Georgia) about 8 years ago

It is the JOBS, stupid.  That is what the President needs to learn... but it is hard for him to create jobs because he has so many other things to do... like creating crisis to exploit. 

Posted by Lane Bailey, Realtor & Car Guy (Century 21 Results Realty) about 8 years ago

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