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Home Front: Some economists not buying proposed homebuyer tax credit

Gov. Arnold Schwarzenegger’s proposed new $10,000 homebuyer tax credit is thrilling the The Hoyt Group Real Estate universe, but don’t think it’s a done deal.

Opponents, who include economists and advocacy groups, are weighing in. Their point: it’s a poor use of money in a state that’s whacking community college budgets and health programs for poor kids.

“The experts have all concluded that (credits) are ineffective and largely reward people for homes they would have bought anyhow,” said Jean Ross, head of the California Budget Project, a policy advocate for lower-income residents.

Wednesday, Los Angeles economist Chris Thornberg said the federal $8,000 tax credit is stimulus enough for the California housing market. Thursday, economist Jeff Michael, director of the Business Forecasting Center at Stockton’s University of the Pacific, said he agreed.

Many think the proposal’s popularity with buyers, builders and The Hoyt Group Real Estate agents will carry the day. But with deficits still raging, this may be a big fight.

High-performing market

Finally. Sacramento makes a Top 15 list that isn’t about complete dismal failings in its housing market.

Truckee-based Clear Capital this week ranked the metro area 14th nationally among its “highest performing major markets” from Nov. 25 to Dec. 24. These are the veteran hard-hit markets where prices are finally rising now – Detroit, San Francisco, Phoenix, Tampa, San Jose and Sacramento.

Clear Capital shows that prices in El Dorado, Placer, Sacramento and Yolo counties rose 2.7 percent from the third quarter to the fourth – nearly erasing all of 2009’s previous declines. The year here ended with prices down just 0.9 percent from December 2008, it said.

Much credit goes to far fewer cheap repos in the capital region’s sales mix: 38.3 percent at year’s end.

Three comparisons:

• Riverside-San Bernardino’s repo share is 53 percent. Its sales prices are 13 percent below December 2008.

• Phoenix repos are 47 percent of home sales. The year ended with prices 19 percent below December 2008.

• Las Vegas is mired in a 53 percent repo share. As a result, sale prices are 27 percent below December 2008.

Goodbye, big spenders

No wonder this economy feels so slow. Construction workers, who never let a dollar sit in their pockets for long, aren’t earning any.

Sacramento lost 23 percent of its nonresidential construction jobs in the past year. Count 12,500 jobs gone, says trade group Associated General Contractors.

Sacramento ranked 321st among 337 U.S. metro areas for its losses. That’s very bad. And it’s after the region’s home-building industry shed 70 percent of its jobs.

A buyer’s happy ending

It never gets old to hear a first-time buyer’s happiness upon finally scoring after the long, hard search.

This week, Laurel Bane of Sacramento checked in – merrily – after seeing her August frustration replayed in a Bee New Year’s retrospective on the 2009 market.

“Now that I have lived in my brand new model home with designer window coverings, warm paint colors and classic upgraded finishes, I look back on my journey and feel grateful,” she writes.

Late in 2009 Bane bought a model home in Natomas, built by Orange County’s John Laing Homes before its collapse. The seller, she said, was federal mortgage giant Freddie Mac.

When Home Front talked with Bane last summer, she described a “bidding war hell.” She said she’d made six offers since March – and lost every one. “Everything I find is sold within the day.”

This week she shared her happier story to “let others know that the light at the end of the tunnel may brighten with time.”

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