Real Estate & Politics: Builders for McCain

Here’s an interesting email I received not long ago. I’ll leave you to your own decisions in this election, but I’d love to hear your feedback on this email, the election, and how you think it will affect our industry.

Dear Jonathan:

We would like to take a moment to discuss with you an individual who is exceptionally vital to the homebuilding industry: Arizona Senator John McCain.

As I’m sure you are aware, Senator McCain is the presumptive Republican Party nominee for President of the United States in the upcoming fall election.

Senator McCain understands our issues better than any other candidate. He has continually taken the time to work with us in Washington. As a senior member and past Chairman of the Senate Commerce, Science and Transportation Committee, Senator McCain understands the nuances of our industry as well as the bigger picture.

The truth is, Senator McCain’s independence and willingness to reach across the aisle to seek solutions on issues facing our industry is the main the reason we are supporting him this fall.

His leadership during the immigration debate and his steadfast support were crucial in advancing this issue which is highly significant to our industry.

Additionally, Senator McCain will work to permanently repeal the Alternative Minimum Tax (AMT) – a tax that will be paid nearly exclusively by 25 million middle class families. Repealing this onerous tax will save middle class families nearly $60 billion in a single year. Under McCain’s plan, a middle class family with children set to pay the AMT will save an average of over $2,700 – a real tax cut for working families.

John McCain will keep tax rates low.

 

Entrepreneurs are at the heart of American innovation, growth and prosperity. They create the ultimate job security – a new, better opportunity if your current job goes away. Entrepreneurs should not be taxed into submission.

While NAHB is not able to officially endorse any candidate for President at this time, we urge you to view Senator McCain’s remarks to the Homebuilders at the link provided below. Senator McCain is someone who fights for what he believes in—a quality which is imperative for our industry, and for the President of the United States. Please join us as a Builder for McCain at http://www.johnmccain.com/nahb/.  We have known John McCain for many years and trust him as a Senator, as a friend, and to lead our country.

 

Sincerely,

Peter D. Herder NAHB Past President 1984 Tucson, AZ		Larry Kush Arizona State Representative Scottsdale, AZ
Connie Wilhelm President and Executive Director HBACA Phoenix, AZ		F. Gary Garczynski NAHB Past President 2002 Woodbridge, VA
Charles J. Ruma NAHB Past President 1999 Columbus, OH		Ray Fernandez First Vice President BIA of Southern California LaHabra, CA

David F. Wilson
NAHB Past President 2005
Ketchum, ID

The $7500 first-time home buyer tax credit/loan/debt. Thank you, Washington!

Much Ado About Nothing, as always.

Thanks to the most popular overpaid politicians in Washington D.C., the home building industry had a glimmer of hope (for now) thanks to the recent housing bill that was passed granting first-time home buyers a $7500 tax credit. This of course is only a bit of Novocaine on the impending root canal that is the end of Down Payment Assistance. Needless to say, being a FTHB myself, I was pretty excited… at first.

First, let’s take a look at this from the Builder or Realtor perspective. The biggest challenge right now for FTHBs is qualifying for a loan. Unless the buyer has a near spotless record and above average credit score, trying to qualify them is a much fun as watching a reality show on VH1. Another challenge for FTHBs is that they (we) are a generation of debt dependants. They have multiple credit cards, cars they can’t afford, loans they haven’t paid off, etc. In other words, this new generation doesn’t have a very good concept of how to save money. Helloooo? Deposit? Down Payment? Closing costs? A $7500 tax credit is useless if you can’t get them in the home to begin with.

To sum it up, this $7500 FTHB tax credit is no more than a great builder scheme incentive that they didn’t have to come up with or pay for.

From a FTHB’s perspective: again, pretty exciting at first! Then I remembered the one thing I learned in my first career (different industry). Credit=Debt=Bad. I do have to give credit praise to the NAHB for putting together a pretty easy-to-read/understand website. This gracious $7500 tax credit (not deduction, as the website clearly states) is a no-interest loan that is to be paid back over 15 years. 15 years? I didn’t plan on staying in my 2 bedroom townhome for 15 years. You mean I have to pay back the unpaid amount if I sell it? Well fortunately for those FTHBs that have lost 5 or 10 (15) years worth of equity in the past 2 years are forgiven. For those like me who got a great deal and have not seen a price reduction in my community since I purchased my home, this does nothing other than prolong the inevitable. I either pay my taxes upfront, or pay it over a 15-year period.

I’m not denying the fact that this is will be a great benefit for some, but it only feeds the demon that is the debt which serves as the foundation of this country’s economy. Debt is bad, mmm-kay?

Question: Have you actually generated any buyers or moved any fence-sitters because of this? NAHB, Centex, KB, and Lennar think so.

NAHB: Federal Housing Tax Credit

NAHB: Builders Finding Strong Home Buyer Interest in Tax Credit