Apparently, there is a bill before the senate (substitute amendment to H.R. 3221) that would issue a $7,000 tax credit to those who purchase a home in foreclosure. This is a $15 to $20 Billion Dollar package is more or less a down payment on what would become a housing bill costing hundreds of billions of dollars.
The theory here is that the volume of foreclosure homes on the market is hurting the overall market. As I mentioned in another post, it is estimated that for every foreclosure home in a neighborhood, neighborhood property values decline by 1.5%.
This is an effort to spur on the citizenry to take risks and absorb those units. This sounds like a prime opportunity for investors. In a market like Austin, where there are relatively few foreclosures – one can hardly claim this is for the public good. I can see where the tax credit could create an unfair advantage for the foreclosure home vs. the homeowner down the street just trying to sell his home.
This bill also includes a bailout to builders to allow them to write off their 2008 and 2009 losses against the more profitable past 4 years. How this helps the general public, I am not sure. It sounds more like government taking care of big business. Then of course, Cesar is going to throw the 600.00 tax rebate down to the peasants. That should keep them quiet.
I am wondering how this bill helps homeowners facing foreclosure at all. To read more about the bill http://www.opencongress.org/bill/upcoming/2-Housing-Stimulus-Package
The purpose of this blog is to report on opportunities for investors interested in the Austin Market. So whether or not this bail out is fair or not really isn’t the point. There is clearly an opportunity for the Austin real estate investor to benefit from this bill — if it passes.
