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Oregonians split on home tax credit

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High Five
Friday, November 06, 2009

Many see Congress' $11 billion boost in home buyer tax credits as a way to help Oregon's housing market, but others consider the improvement temporary.

Mark McMullen, a Moody's Economy.com director, said Oregon's modest turnaround in the housing market "could almost entirely be attributed to the credit."
But other economists say the tax credit is creating a false bubble, moving sales that would have occurred anyway in 2010 into 2009. They say that means the program isn't costing the government $8,000 per buyer, but $40,000 or more if the measure is buyers who otherwise would not have made a purchase.

Read the full story at OregonLive.com.

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Dave K
0 #1 Trickle up and trickle down.Dave K 2009-11-06 14:31:53
While it may be true that some buyers would have bought anyway, the level of uncertainty has kept many people out of the market for at least a year or two. This buyer incentive, together with terrific interest rates and a well-priced inventory of homes to choose from, has help the fence-sitters make a buy decision. Every home purchase decision triggers many more side expenditures: insurance, title and escrow, furniture, paint and floor coverings. Employee earnings are enhanced, lenders, real estate licensees, contractors and handipersons, sales people, tradespeople, on and on. A single home purchase decision has an extensive multiplier effect. Final cost of the program, perhaps $50 billion as opposed to the $700 billion bailout of wallstreet. And what was the effect of that? We kept them breathing. Multipliers through increased lending? Not so much.
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