Extending the Tax-Credit, Are We Avoiding the Inevitable, Are We Benefiting from the Mortgage Crisis?

Will They Extend the Tax Credit?

Are We Trying to Push Off "The Inevitable"?

Are We Still Benefiting from the Sub-Prime Crisis?

The Times of Trenton just released and Op-Ed piece on the possibility of extending the tax credit. Written by Staff Writer and Executive Vice President of the New Jersey Association of Realtors, JARROD C. GRASSO, this piece makes another "expected" case for the extension of the tax credit.

What will be interesting is if we will see any realtors, brokers, mortgage brokers, inspectors, appraisers or anyone who stands to benefit in the short term from a tax credit step to the plate and offer an intriguing reason why an extension wouldn't be in the best interest of the economy. Don't get me wrong: I have benefited and continuing to benefit from the tax credit, but I have read some things (not written by anyone who stands to benefit from the immediate impact of home sales) suggest that we are simply pushing off the inevitable decline.

I don't know.

I do know this: those of us (Realtors, inspectors, etc.) who are presently benefiting in this market are still simply benefiting from the market that cased the "crash" in the first place. Yes: we are still benefiting from the sub-prime mortgage mess and nobody talks about this.

Think about it.

The Right Side of the Pendulum: This "right side" was the time when "anybody could get a loan". While I see the sorry and personal aftermath of this issue everyday, let's get one thing straight: many of us made a lot of money from people purchasing homes they really shouldn't have purchased.

The Left Side of the Pendulum: We are simply now on the other side of the pendulum, but we are still benefiting. People lost those homes, the markets were flooded, and incentives were set in place for home sales. Some are natural (over supply drops the prices of homes, which creates demand), and others are unnatural (5-6% interest rates and $8,000 tax credits). Why? Because of the sub-prime mortgage crisis.

However you slice it, then, we are still benefiting from the same crisis. Yet, nobody talks about this.

This leads then to an interesting observation and question:

Observation: October, November and December (as far as I am concerned, basing it off of how many inspections we were doing in our area) was my "synthesis"-the pendulum passed from right to left. It was really... really... slow. Sure. Are we busier than others: absolutely. But slow for "us". We knew something was not going right. However, January came... then March... then came 60-80 hour work weeks for the last 6 months of my life.

Question: Was October-December 2008 simply a pre-cursor? While the rest of the economy has struggled in this "recession", we have benefited. But are we next? Will all of us-Realtors, appraisers, inspectors, mortgage brokers, etc.-eventually see and feel the recession, but just later that the other segments of the economy?

Does extending the Tax-Credit or creating another similar Tax-Credit simply push off the inevitable decline in our industries?

Certainly, I hope not. I have a business to run, I have children to feed, and I have a wife who has expensive tastes, etc.

But... I wonder.

What say you?

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Justin Nickelsen, CMI

Board Certified Master Inspector

Nickelsen Home Inspections, LLC

"A Conduit for Educated Real Estate Transactions"

Vancouver, WA / Portland, OR