NorthWest Florida Republican

Obviously no one in this current Congress or the President has learned the lesson of the Cash for Clunkers. The Home Buyers credit did nothing for property values or sales.

Many of the main stream media outlets were claiming that the sales of new and existing homes fell unexpectedly. What I can’t understand is why it was unexpected. Homes had to be purchased by the end of April to qualify. If they had taken some time to research the last one they would have noticed that home sales fell after it expired as well. Nothing unexpected about it falling this time either.

However, some in Congress may see it as a sign that another extension may be needed.

In effect, I think what we’ve done is pull ahead a lot of sales,” de Ritis said. “And we’re just realizing now that we’ve pulled ahead many more of the sales than we had anticipated.”

Still, the number is so bad that it makes a decent case for an extension and retuning of the tax credit, de Ritis said.

Michael Widner, an analyst with Stifel Nicolaus & Co., told SNL that the tax credit did nothing to help housing fundamentals and only pulled demand forward. In a June 22 report, Widner predicted the new-home sales rate would hit 295,000 in May, just 5,000 units off the actual pace.

“The tax credits just add noise. The tax credits don’t create more households, they don’t create more people, they don’t create more families,” Widner said. “They just give people incentives to buy houses sooner rather than later. And at the end of the day, there’s no substitute [for fundamentals]. It’s a long, slow trudge through 10 years of overbuilding.” SNL.com

All this would do is “kick the can down the road”. Another extension wouldn’t accomplish anything.

This is also what is causing all of the lost sales of the local condo owners more than the spill is. They are not the only ones suffering from the lack of sales either. Even in my neighborhood many homes have been on sale for months.

Congress needs to get out of Economics.