Kudos to Scott Van Voorhis of the Boston.com’s real estate blog, for congratulating readers in his retrospective today entitled, “Back when everyone was riding the tax credit bandwagon, you called it right.” Need The Real Estate Cafe say more than this cleverly titled blog post and our own quote in The Boston Herald to say we saw the continued downward trend in housing prices, too?
$10,000 tax Credit? How About a $38,000 “Tax Credit?”
“Savvy buyers knew the real savings would come after the artificial stimulus ended,” he said. “Lots of buyers felt that the credit was a fool’s game. They were determined not to be fooled by the credit’s come-and-get-it expiration date, and they weren’t going to be fooled into a bidding war.”
~ Bill Wendel, owner of Real Estate Cafe in Cambridge, MA
Add that to this stunning finding in an article documenting the disappearing middle class:
“Only the top 5% of US households have earned enough additional income to match the rise in housing costs since 1975”
And a discussion, at a recent real estate conference, about “The Big Housing Lie” which attributed housing price appreciation to annual inflation and increased purchasing power from changes in financing, and you’ve got a systemic problem that’s much deeper than cyclical peaks and valleys in demand caused by a tax credit that offered the illusion of savings.
Surely one of the most critical questions should be how to prevent another real estate boom / bust cycle in the in future. Policy makers need not wait to enact regulatory reforms, including no conflict of interest requirements and regulating blind bidding wars and other manipulative bidding practices — the subject of a two previous RENow blog posts about clamping down on bidding wars that attracted many reader comments, see Why not crack down on bidding wars?
If you’re do-it-yourself homebuyer who’s been following price reductions, you can add to your savings with our end of the month offer to save 25% to 50% off the Real Estate Cafe’s menu of fee and rebates. Contact us in the next 24 hours to learn how you can “Carpe Discount.”