Thoughts from a Realtor about a possible Government Shutdown

I am writing my opinions from an individual standpoint as a Conservative real estate agent, this is not the opinion of any group.

My personal, non-professional opinion may not be popular with some people, but I think that a shut-down would be a clear message to the President and the Senate that the Republicans mean business and the years of mismanagement of the federal government are to come to an end. Politically, the Republicans cannot risk a repeat of the late 90s and early 2000s where they did not cut government as they had promised. Of course, my opinion runs beyond politics as the debt that the U.S. Is carrying is detrimental to both national security and the economy.

There is not a business model for the way government has been run the past fifty years. The day has arrived where we, as Americans, must get our fiscal house in order. Otherwise, we will continue to be forced to deal with nations such as China that have such poor human rights records. If we did not have so much of our national debt with the Chinese, we could utilize our trade relations with them to bring about changes there.

On the business side, a prolonged shut down of the federal government could adversely effect the housing market as it may lead to a tightening of the mortgage markets with Fannie Mae and Freddie Mac. I don’t think the shutdown will impact them directly and I am sure they would still be in business, but it may effect the federal funding they receive and thus, impact their ability to purchase mortgages.

With that said, the long-term benefits of getting the financial house in order, would be worth the immediate detriments to the housing market and the economy.

Now, some thoughts on the proposed $10,000 tax credit for the purchase of a new construction home. I have some mixed feelings about this proposed tax credit that the National Association of Realtors (NAR) has been proposing and attempting to get Realtors on board to support it. On one hand, it will be beneficial to a segment of the real estate market that has been sluggish over the past several years and could result in getting some of the vacancy rates down in many areas of the country. Areas such as Nevada and Florida that have large numbers of unsold new homes would benefit greatly with this incentive. However, it is not the business of government to pick winners and losers. Obviously, the winners would be the builders and banks who own these vacant homes. It would also benefit the overall market as getting the inventory under control would help home values rebound. The losers, of course, would be all of those home owners who are trying to sell their homes. It would give the builders an unfair advantage over the resale market.

I personally have listings that have been on the market for over a year, and this credit would make it even more difficult for these homes to sell. As a Realtor who doesn’t represent builders, it would virtually destroy my listing business.

This may not be popular with my real estate friends, but I think the government should let the market recover on it’s own as it would result in a better and more sustained recovery. It never makes sound financial sense to make a major purchase of hundreds of thousands of dollars for a relatively small credit on your taxes. If you are ready to buy anyway, the tax credit is a great incentive to get you off the couch and make a home purchase, however, I fear that too many buyers purchased under the previous tax credits were not ready for the responsibility of home ownership. And of course, these homebuyers are simply foreclosures waiting to happen.

If you have any questions about the housing market in Raleigh, please feel free to ask as I would love to be of assistance.

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