To Extend or Not to Extend? The Question Du Jour.

• Boy oh boy the emotions are running high on this issue. So many Realtors® are weighing in as we approach the deadline for the $8,000 1st Time Homebuyers Tax Credit. If nothing happens, the program will expire November 30th. A bill in Congress to extend the credit has been making its way through the system. Now, in offices across the country, Realtors® are making themselves heard on the subject.
  In favor of extending, many real estate professionals believe that the $8,000 tax credit is responsible for the recent spike in home sales many have experienced. They believe 1st time homebuyers are the ones cleaning up the bottom of the inventory, a critical step toward recovery of values and implementation of a healthy, sustainable market. For agents who have been struggling to keep heads above water as the product inventory nearly drowned the entire industry, any subtraction of incentives is inconceivable.
  Our own survival, however, cannot be what we are prioritizing, because we are a short-sighted consideration. The long-term health of our businesses is tied to the broader health of our industry, which is inexorably tethered to the economy at large. To borrow a phrase, ‘It’s got to be all about jobs.’ And a home-buying tax credit does not address that issue.
  With that said, a fair-minded argument against extending the credit might also provide that creating a false premise upon which buyers will stand to make a purchase today may lead to a ride on the same roller coaster we just experienced. Some analysts have opined that the not-quite-ready buyer of today, using the $8,000 as an incentive to buy sooner than he might be ready, would remove that buyer from the market in, let’s say, 2 years when he might be more qualified, spend more, and be more likely to keep his property through a substantial increase in value. Of course, this scenario requires a finite number of buyers and an apples-to-apples comparison of properties and unknown future markets. Since these conditions do not, and cannot, exist the argument is pretty readily disassembled.
  On my personal tour of this spectrum of ideas I wander from one extreme to the other before pausing to find the center. The center’s gotten a bad rap in recent years, as political considerations often pander to a mealy-mouthed, unconvincing, centrist point of view in an effort to not upset the deaf and blind stalwarts at opposite poles. But the image of a bland and soft center is not at all what I see. Instead, I liken the center to the solid concrete post upon which the see-saw rests. Steady, simple, practical, not prone to radical shift. In the end it is the center that holds everyone up off the dreck and mire below. So instead of settling for a black or white solution, why not examine a compromise position? Or several of them?
  
  What if we did extend the tax credit, but this time for homeowners? An $8,000 tax credit would likely be an incredible boost to families trying to continue their records of on-time payments and responsible homeownership.
  
  Extend the tax credit but limit it to certain property categories. This way, you could specifically target the bottom-rung, instead of simply hoping that that’s where the homebuyers will be spending their money.
  
  Extend it but reduce the limit – or tie the limit to a show of savings. In this manner, you could ensure that home buyers are not simply relying on this one-time infusion of cash to make a purchase that requires a long-term commitment to fiscal responsibility.
  
  Don’t extend it, but install different programs to boost residential real estate recovery –
  
  Could the Habitat for Humanity be offered some assistance to take over foreclosed properties and rehabilitate them for resale, with an interest on the sale being returned to the government for its contribution?
  
  Could the government forego some reimbursements from the banks that received TARP money in exchange for reassigning foreclosed properties to the military? So that veterans could have an opportunity to integrate into residential communities at a reduced cost in thanks for their service? Would this take some of the weight off the burden the government – we all – carry in trying to accommodate the housing needs of our military families?
  
  Could the government provide some resources to high schools and laid-off construction workers to create bridge programs where high schoolers could use service hours to help clean-up and laid-off construction workers could contribute some help to fix-up abandoned properties in residential areas?
  
  What if the government participated in supporting a Realtor®-facilitated exchange system, like a vacation property exchange? An example might be a retiree offering a single family home in favor of a condo. A match would occur when a young couple looking to upgrade from a condo would find the retiree’s single family home. Instead of adding these properties to the existing market creating a greater stock of unsold homes, they could bypass the wait and get what they need more efficiently.
  
  I’d be happy to exchange these offerings for other ideas that would work better. I just think the solution cannot be an all-or-nothing stamp on the crisis. Either we extend this credit and we survive or we don’t and doom and gloom follow us all the days of our lives. Really? No.
  
  We can figure this out if we try. What do you think?