At its November 10th meeting in Orlando, the National Association of REALTORS decided to ask the U.S. government (taxpayers) to do the following:
1. Make the $7,500 first-time home buyer tax credit, enacted earlier this year as part of housing stimulus legislation, available to all buyers and eliminate the repayment requirement.
2. Make 2008 Fannie Mae and Freddie Mac loan limits permanent.
3. Get the U.S. Treasury to target funds from the $700 billion federal economic rescue package to mortgage relief and create an interest-rate buydown program for residential mortgages.
4. Permanently bar banks from entering real estate brokerage or management.
Don’t hold your breath. Even if they are all upheld, we are skeptical that any of these programs will do much good for the housing market. For instance, it may sound good that Fannie Mae’s purchase limits stay inflated at over $729,950 in high priced markets instead of $625,500, but if that ends up making Fannie Mae hemorrhage money or the US Government to lose its AAA credit rating, how much good will that do?
Barring banks from real estate? Considering how bad banks screwed up real estate lending the last 8 years, I don’t think Realtors have that much to worry about in real estate brokerage.
No down payments for first-time buyers (through a free tax credit) sounds great as a seller, except that many sellers will remain real estate owners after they sell and the credit will cause future pain. No down payment mortgages are what got us into these problems in the first place.
The government needs to shore up its own finances. When this happens, the economy, jobs, and YES residential real estate will benefit.
If you price your home to sell, it will generally sell, even in today’s market. Take the proceeds and opportunistically re-invest. Don’t get caught up in all these market-distorting programs.