Wow! It looks as if the congressional stimulus package now coming together in Washington may find a way of providing some assistance to our beleaguered Palm Springs real estate market. The New York Times is reporting today that today the Senate approved by voice vote a measure that, if approved, would provide up to $15,000 in a tax credit to today’s homebuyers.
The bill is sponsored by Senator Johnny Isakson, a Republican Senator from Georgia and former real restate broker. This may not just be “pie in the sky” as this guy is out of the industry. While some may argue that it’s pandering to the big housing industry, I am not sure exactly how putting a potential home owner into a much needed primary residence and reducing our bloated housing unsold inventory could be considered pandering.
Senator Isakson argued that this provision of the stimulus package was modeled after a similar $2,000 homebuyer incentive in 1975 that helped lead the country out of that earlier recession. He went on to argue that, “We do have a history in this country with housing and it goes back to the crash of 1974, which actually in terms of inventory and price declines was comparable to what’s happening now”.
“Within one year of the inception of that tax credit, two-thirds of the available inventory that was on the market was gone. The market moved back to a balanced inventory, values stabilized and things became very healthy. The only reason I know all of that is I was selling houses in 1974, that’s what I was doing to feed my family and make a living”.
The proposed tax credit would give buyers 10 percent of the price of a primary residence, bought within one year of the bill’s enactment, up to a total of $15,000.
Evidently this provision has a way to go before we see any tangible benefit. However, this tax credit provision, or something similar, is the first tangible sign that our noble leaders are serious about fixing the problems on Main Street.
Now if only they would stimulate banks to provide home loans again! As the Chinese proverb says, “A journey of a thousand miles begins with the first step” . . . or something like that. For the complete New York Times article, go to Homebuyer Tax Credit.