Perrysburg Blog

The 2010 Federal Tax Credit, which has to have a property not only under contract but closed before the end of June is done.

It’s too late.

For you and for me . . . if you or I don’t have a house already under contract.

But . . . if you already have an accepted offer and you are trying to get your deal closed before the deadline is crossed on June 30, Operation Chaos is in effect.

As I have spent much of the day talking to lenders and service providers I can tell you that they are under HUGE stress right now.

Nationwide there are hundreds of thousands of deals hanging that MUST close by 6/30.

They are stressed, pressed, being threatened and or cajoled.

And they are running out of time.

There are new RESPA rules.  New rules for appraisers.  New HUDS.  And now this artificial deadline is the cream on top of the frosting on the cupcake of stressed out buyers.

Ouch!

Therefore, it is good news that if your deal is already in the hopper the Feds are giving you more time.

Details here.

More time.  It will help.

So will some massage therapy sessions.   Some vacations for the loan guys.   And some more hours in the day.

It is Monday.

72 degrees and sunny.

The Federal Tax Credit program expired on Friday last week.  Back to normal.

Sometime last month the Fed stopped buying/funding Mortgage Backed Securities.   The tap was turned off.   The world?  It did not end!   Investors still want to buy mortgages!   Back to normal.

There are no major Ohio loan/bond issues being promulgated.  Back to normal.

Two offers on Perrysburg listings today:

A buyer just submitted a conventional financing loan/offer to me.

Another buyer . . . . the same.  Back to normal.

In Perrysburg real estate, with no tax credits, special government loans, and other market deforming forces THIS, today, right now is normal.

Rules for this market, now that it is finally normalizing:

1. Price is king.  Queen.  And Jack.  It’s all about price.

2. Perrysburg still get’s the “Perrysburg Premium”.  It just does.

3. Quality of life, crime, schools will continue to be more valuable.  Perrysburg ought to not mess this one up.

4. It has to appraise.  Your wants/needs/sticker price/contract price  . . . all will be validated, satisfied, and hostage to the appraisal.

5.  It’s allright to mow your neighbors yard.  Seriously.   If they are gone – foreclosed – abandoned – you can mow it.  It keeps up appearances.  It keeps out the petty crime that vacant houses attract.  It actually may increase your homes value.   Neighborhoods have to start banding together.

Here’s a three year overview of supply and demand in the entire Northwest Ohio market:

It has leveled out – the new normal has arrived.

This site - www.usdebtclock.org.

In honor of the soon to be renewed and expanded taxpayer giveaway of money to MORE home buyers – shamelessly pushed by my own guild/trade group the National Association of Realtors . . . I urge you to go HERE.

Think about this when you vote on Tuesday.

When you think about what we are doing to our children and grandchildren.

Just think about it.

It is madness.

The mouse is not running up the clock.

No, the clock is running out on the Grand 2009 Housing Gold Rush Tax Credit.

Think about it – you are going to be GIFTED up to $8000 dollars US currency for buying a house you were going to most likely buy anyway.

Amazing.

For whatever reasons they have chosen – Big Government has decided to intervene on the street, at the place you live, with intimate precision in your wallet.

Because $8000 is a lot of incentive.

No whether you are a libertarian free-market capitalist or not – you will still take the money if it is offered to you.   I would.  Some 100 year quote from Justice Leorned Hand echoes in my mind . . . . .

So – take the money and run.

No one will think the less about you – forget that the USA is broke.   That we don’t really have $8000 to give you.   We will print it.  Or we will borrow it from China.  And your children can pay it back someday (with interest).

But the stock of under $200,000 homes and the number of days you have to close are finite.

So buy now – and let our leaders who authored this program worry about the consequences!

Not one bit.

There are going to be income phase outs.

There are going to be all kinds of government red tape requirements.

But don’t believe me.

Read the experts.

A real economist, James Hamilton, opines:

“If my hunch is correct, then all the house purchase tax credit will do is to modestly increase the number of houses sold each month… with no noticeable impact on house prices.

That doesn’t mean that the tax credit would have no impact. In particular, it may be a boon to some cash-constrained households that want to buy a house right now but can’t borrow enough. And it should help to reduce inventories of unsold houses by a bit. But if you’re hoping that it will make house prices rise, with all of the beneficial economic effects on home equity that such a rise might have… think again.”

Do we really want to be encouraging “cash constrained households” to buy houses they really cannot afford today?

Seriously.

Is not that “solution” somehow related, at least tangentially, to the problem we find ourselves in?

With a GM and Chrysler bankruptcy imminent . . . with declining real property values in Perrysburg . . . with our regional banks failing . . . might I suggest a tax cut?  A payroll tax cut?  A tax holiday?  A tax cut for business?  Something to goose employment?

I will encourage every American to pray for our leaders.  Pray that they have wisdom.  They are lacking it right now by borrowing or printing a TRILLION DOLLARS that we don’t have for things that will not work.