Over at Derby City Cents, there’s a chart of how the federal homebuyer tax credit affected home sales. It boosted sales, which then dropped once the credit was no longer available.
Now, with a full year of numbers available, the numbers appear to back up what Realtors like Mike Gandolfo at Semonin and Greg Fleischaker have been saying for a while: All the taxpayer subsidy did, for the most part, was encourage buyers to move a little faster than they would have otherwise. It didn’t create new buyers out of thin air.
There some questioning of the program last year, but it’s a mixed bag. While one side may say the program was too expensive, others will argue that anything that stopped people from procrastinating on large purchases is helpful. While the effects may be minor, moves could have a stimulative effect (with sellers hiring movers, buying new accouterments for the home, donating/selling the old furniture, etc). There is also evidence that the tax credits led to a slow but steady growth in some markets.
Last year, broker Paul Kriger theorized that the tax credit would have the trickle up effect discussed in the New York Times article linked above. He also said the credit was essential in getting reliable buyers signed on to new mortgages. Whether that works, though, remains to be seen.