The only ‘real’ movement has been with the now expired income tax credit which is now cause for concern as it only prolonged the inevitable further erosion of housing prices, noted as correction by some industry, financial and government analysts.
Homeowners reluctant to take the loss on their investments are refusing to move their prices to sell. For example we viewed a single family residence in Cornwall-on-Hudson, New York with a list price of $600,000.00 with an assessment of $300,000, what does this mean for the buyer? DON’T BUY!
You are hedging a bet of $300,000 that the housing market devaluation has bottomed out and will attain your purchase level…not so quick cowboy.
The assessment levied on your property will become the $600,000 and with the crushing local, county, state and school taxes in New York State you will never be able to recover your investment.
The market had been artificially buoyed with federal bailouts, for the financial institutions not the victims of predatory lending, and the force of the $8000 tax credit. Now the program has run its course with trillions spent and the housing market is right back where it started when it crashed.
Until the politicians allow the market to correct itself, prices allowed to fall to realistic numbers, the beached whale corpse (housing market) will remain to rot on the beach (economy).
“How has the market found the strength to stop its descent? No one is making the case that fundamentals have improved. Instead, there is widespread agreement that government intervention stopped the free fall. The home buyer’s tax credit, record low interest rates, government mortgage-assistance programs, and the increased presence of Fannie Mae, Freddie Mac and the Federal Housing Administration in the mortgage-buying business have, for now, put something of a floor under house prices. Without these artificial props, prices would have likely continued to fall.
Where would prices go if these props were removed? Given the current conditions in the real-estate market, with bloated inventories, 9.8% unemployment, a dysfunctional mortgage industry and shattered illusions of real-estate riches, does it makes sense that prices should simply fall back to the trend line? I would argue that they should overshoot on the downside.” – Home Prices Are Still Too High By Peter D. Schiff, president of Euro Pacific Capital and author of “How an Economy Grows and Why it Crashes” (Wiley, 2010).
In the area surrounding The U.S. Military Academy at West Point the decent habitable rentals (slum lords are operating with immunity at this point) rental prices are artificially high due to the housing renovation project being constructed on its main campus and the closing of the off post housing at Stewart International Airport.
Once completed and the service members and their families relocate back to post the local housing and rentals market is going to get a huge kick in the teeth and the local economies, governments, school districts will all suffer from the diminished tax base with local businesses getting hit by the drop in business also. Think back to what happened when the U.S. Navy was thrown out of their naval Base at Subic Bay, their entire economy crashed because it was built on the paychecks of the service members and government payments.
We have not seen the last of this story…
K2 GLOBAL COMMUNICATIONS LLC: Partner Greg Kelly is a combat veteran having served in the United States Army with the rank of Sergeant in the Elite U.S. Paratrooper unit of the 82nd Airborne Division (Grenada) and the 2nd Infantry Division (Korea).
His professional experience includes specializing in public relations, international relations, public/government affairs, corporate communications, and relationship building from the local-to-international level. He has worked as a U.S. Congress Assistant. He is also the former Manager of Public Relations, Marketing and Advertising for the Korea National Tourism Organization where his duties included speech writing for senior Korean government officials and establishing and maintaining working relationships with various foreign and domestic companies, government agencies and media outlets.
ALL-AMERICAN Member 82nd Airborne Division Association;
Mr. Kelly graduated with a Bachelor of Arts from State University of New York at Potsdam where he majored in political science and minored in communications.
Mr. Kelly resides in the Hudson Valley, married with one daughter.