More free money?
Senate extends home-buyer tax credit and jobless aid. The existing tax credit for first-time buyers, set to expire at the end of the month, has helped boost home sales across the country. Under the Senate bill, both first-timers and existing homeowners would be able to take advantage of the expanded program through the end of April.

The measure would continue giving an $8,000 tax credit to first-time buyers and would provide a $6,500 tax break to qualified homeowners looking to move up to middle-market homes that cost no more than $800,000.

In addition, the legislation would raise the qualifying income levels to $125,000 for individual income tax filers and to $225,000 for joint filers.
Set up for the next bubble? Rather the set up the next collapse - I believe this is a case of fueling the current fire.
As for good intentions - whenever I see Chris Dodd & Co involved - good intentions are last thing that come to mind. What comes to mind is the Community Reinvestment Act. Déjà vu all over again. Cash for clunker real estate.
As usual, govt. intervention in markets results in either helping those who do not need the help or introducing an element who should not be participating in that market.
This action by Govt. further “distorts” an already woefully distorted market. If someone is giving me a $6,500 “grant– gift or write off “ to buy what I would otherwise not be able to buy or need to buy – that becomes a $6,500 “distortion” of market value. Sounds like a meaningless amount until one ads up all the other “incentives “that are already in place to buy real estate and multiplying it over time and market size.
The best analogy I can think of is holding a beach ball up with your extended arm. Everything is fine as long as one keeps his hand under the ball. What happens when the arm is taken away?
All they are doing is falsely supporting an unsupportable situation that will not correct until they cease supporting it. This, as with most of what escapes the confines of the beltway, is about control, votes and lobbyists money.
Especially when the action’s intent is to encourage people to go further into debt to buy a commodity (real estate is a commodity at this juncture ) that is in such overwhelming supply to demand, it is a marginal investment at best, regardless the incentive. If one takes pause and adds the falling value of the dollar and the inevitable inflation, well, lets just say that the govt is encouraging individuals to urinate on a forest fire with the expectation of not only curtailing the inferno, but to fertilize the ground in the process. The individual is more likely to be incinerated rather than harvest timber anytime soon.
Is it good for buyers? No. Not if they are also taxpayers. Buyers are always better served by a lower overall purchase price than any subsidy that will eventually come out of their pocket one way or another.
This appears to be more a direct result of the NAR's lobby than any concern for “righting “the ship of the general economy. It looks to this auctioneer more like a subsidy for Realtors than a sound investment opportunity for buyers.
Omar P. Bounds III A.A.R.E., C.E.S., G.P.P.A