Almost everyone who took the bribe of an $8,000 tax credit to buy a house in 2009 and 2010 has lost money, writes Brett Arends.
Nov. 8, 2011, 12:00 a.m. EST
The great $26 billion real estate swindle
Commentary: Pity anyone who took the tax credit to buy a house
By Brett Arends, MarketWatch
BOSTON (MarketWatch) — Call it the Great Rock & Roll Real Estate Swindle. Call it a $26 billion Bait & Switch. Call it the Mother of All Boondoggles.
Call it whatever you want.
But as foreclosures surge again and house prices continue to slide, new data out Monday reveals more of the grim verdict on the $26 billion federal program in 2009 and 2010 to offer tax credits to home buyers.
You may remember that between the spring of 2009 and September 2010 the government handed out credits of up to $8,000 to induce people to buy a new home. It was supposed to gee up the housing market.
How’d that work out?
Zillow.com, the real estate information company, says the average price of an American home fell again last month to $171,500 — the lowest level eight years. That’s down 4.4% from a year ago, although it’s been about stable over the summer.
Now compare the average prices with those that people paid in 2009 and 2010, when they took advantage of the credits.
According to Zillow, prices during that time averaged about $186,000.
In other words, based at least on average prices, you’ve lost about $14,500 — nearly twice the value of the credit. Stan Humphries, Zillow’s chief economist, says the credits, effectively expired in June 2010, when prices nationwide averaged $182,000. Since then we’re down $10,500.
.
.
.
The IRS says the entire program cost taxpayers $26 billion (though of course it was put on the national credit card, on which interest rates are very low). That money has vanished. It has, as the saying goes, “gone to money heaven.”
.
.
.
Full story: http://www.marketwatch.com/story/the-great-26-billion-real-estate-swindle-2011-11-08
Gold is $1,581/oz today. When it hits $2,000, it will be up 26.5%. Let's see how long that takes. - De 3/11/2013 - ANSWER: 7 Years, 5 Months
| 
