Demand for new homes fell in August, a decline California homebuilders attributed to the discontinuation of the successful CA home buyer tax credit program, according to a recent report by the California Building Industry Association (CBIA). “The significant drop in traffic in July due to the state closing out the successful tax credit program continued in August, holding down new-home starts and, correspondingly, job creation,†said CBIA President and CEO Liz Snow.
Homebuilders pulled permits for 2,911 total housing units in August, down 5 percent from July, according to statistics compiled by the Construction Industry Research Board (CIRB). CIRB is forecasting permits will be pulled for 39,500 total units in 2009, the lowest total on record.
What Ms Snow is referring to is a misguided California new home bail-out program. For full details, please see my prior posts:
California Gives New Home Buyers $100 Million & $10,000 for California homebuyers — Good or Bad? So it would seem that without artificial stimulus, both in direct tax credits and low interest rates, the California housing market is not just weak but, anemic. This portends bad news as it’s only a matter of time before the Fed will no longer be able to manipulate the mortgage market and rates start their inevitable rise. So, what’s next, the end of the Federal $8,000 home buyers credit? Don’t believe it! I know this program will not end this year but may very well be increased and expanded with even more liberal qualifications. Take a look at my 9-18-09 post: New $15,000 Home Buyers Credit? . It may take another year or two before a real housing base develops here in San Diego. As usual, with these start projections, I hope I’m wrong,and it turns out that the ‘buy now’ crowd is right and San Diego’s housing base is being formed right now. I just wouldn’t bet on it.                                         San Jose real estate
The perfect storm of a complete real estate collapse is a couple months away. Be ready for a wild ride!
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Don’t worry, the government will save us! I mean, that’s why we have one right?
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This is the result of cooking the books to give home loans to people who otherwise couldn’t even get a car loan. The lenders and the borrowers are equally to blame. They created the bubble that burst- and who are the true victims?– those of us who could actually qualify for the loan and are still making house payments and homes that are rapidly depreciated due to the crooks and liars who cooked the books.
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