A thought on home sales..

Disclosure: I currently own a condo that I am trying to sell, therefore I am biased when it comes to this topic.

I am reading the news this morning and come across the top financial news story of the day, "New Home Sales Surge 11 percent in June." (link below) While this is great news for the country and speaks towards the beginning of a recovery, it begs the question - why are new homes being focused on? Granted, there are a gluttony of jobs that are created via home building (sales, architecture, construction, customer service, etc) but wasn't the shear amount of homes on the market and the techniques used by sellers/lenders what got us into the housing crisis to begin with? These builders were raking in profits throughout the middle part of the decade, and now they are cutting their prices which will put Americans who paid to much for their homes to have to wait even longer for prices to recover.

The first time home-buyer tax credit of $8,000 was a good start, but obviously could have been extended to current homeowners looking to upsize. But extending these credits in this manner, people who bought more home than they could afford would have a larger base of potential buyers to help them out. As well, those of us that are likely to loose money on the sale of our existing home would have the confidence that the tax credit would end up making up for most of our losses. Better yet, losses on existing home sales could be tax deductible.

The overall point I am trying to make here is the continued focus to help businesses and hurt the people. A lot of these home builders are responsible for the number of houses on the market and the subsequent crash, they should be almost encouraged into bankruptcy for their part in this mess. The true recovery will come when existing home sales start to truly increase, but I fear our legislators aren't doing all they could be to expedite this process.


http://www.washingtonpost.com/wp-dyn/content/article/2009/07/27/AR2009072700967.html?hpid=topnews Sphere: Related Content