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Thursday, September 9, 2010

Housing sales plunge

Posted by Max Brantley on Thu, Sep 9, 2010 at 10:11 AM

As forecast by national figures released earlier, housing sales in July plunged in Arkansas by more than 31 percent compared with the same month a year earlier. Among the top 10 counties, only Craighead showed a sales increase, with a 16 percent rise from 83 units sold in July 2009 to 97 this year. Year to date statewide, sales are slightly ahead of last year.

Tags: Arkansas housing saqles

        
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Interesting article in yesterday's NYT about home prices. Basically the issue is whether the money you spend on a home increases along with your income, or does it follow a path that more or less tracks inflation, like food. There's data both ways.

If home prices track income, then we might be near the bottom. If home prices track inflation, then we're still about 30% overvalued.

To me, the entire real estate industry is a superb example of corporate welfare, government-enabled transfer of wealth and lobbyist distortion of the market. Our tax policies generate income for real estate companies and developers, give unfavorable treatment to those who don't make enough money to buy a home, and generally are a significant cause -- if not THE cause -- of the housing bubble.

For example, it is the height of fiscal irresponsibility to offer tax credits to first-time home buyers. If a buyer could afford a home without the tax credit, all we've done is give them some taxpayer money and add to our deficit. If a buyer can't afford a home without the tax credit, they have no business buying a home. But the credit pumped up revenues for realtors, and therefore their lobbyists, and that's what it's really all about.

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Posted by OccupyLittleRock on September 9, 2010 at 10:35 AM

Yes Roland, the tax for first time home buyers IS welfare for corporate AND private interests.

The idea that tax policy is strictly about revenue is a farce, there are dozens if not hundreds of taxes designed to influence social behavior.

In this case the government has decided it is advantageous to the society that more people be home owners, and it has directed it's tax policy in that direction.

If we're going to get rid of the credit for first time home buyers then we should also get rid of the mortgage deduction, they both benefit the same interests.

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Posted by 70%er on September 9, 2010 at 10:57 AM

I agree totally about the mortgage interest deduction. It's maybe the biggest offender.

And what may be worse, it is the teat that the public won't let go of, guaranteeing that any real income tax reform won't happen.

Worse yet, almost two out of three taxpayers take the standard deduction, meaning they aren't itemizing their interest as a separate tax deduction anyway. It provides them no tax benefit, yet they believe it does and they're not going to be separated from that delusion.

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Posted by OccupyLittleRock on September 9, 2010 at 12:04 PM

I bought a home with that first time buyer credit...spent it all at the casino.

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Posted by ironfortified on September 9, 2010 at 2:26 PM

Maybe we need ONE MORE Home ownership Dream President. "Owning a home is a part of the American Dream."

Just who was it that jump started the housing bubble?

Shirley not the man who called for taxpayers money to be used for subsidizing down payments on a home. Shirley not a Republican. Shirley not the President who sought commitments from Fannie Mae and Freddie Mac to make more money available to first time home buyers who didn't have the down payment?

Listen to the nightmare taking place....circa 2002:

http://www.youtube.com/watch?v=kNqQx7sjoS8…

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Posted by eLwood on September 9, 2010 at 2:35 PM

Here is a good question. Will the government try to persuade the public that it isn't good to own houses anymore? They could make interest rates jump into the double digits. That would probably persuade people not to purchase a home.

Something needs to be done.

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Posted by arkansas panic fan on September 9, 2010 at 4:25 PM

The genesis of the meltdown. Thanks for the link Elwood.

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Posted by jrb on September 10, 2010 at 7:58 AM

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