“And you shall hear of tax credits, and rumors of tax credits…”

I’m paraphrasing from the book of Matthew here. The rest of that verse (it was, of course, “wars” instead of “tax credits”) goes, “See that you be not troubled: for all these things must come to pass, but the end is not yet.” I realize that Jesus was talking about things far more eternal than the early 21st Century American housing market, but you have to admit, it
works well anyway.

Who knows where the idea of a new round of home buyer tax credits got started, but depending on who you listen to in Washington, you get every position from, “It’s very likely,” to, “We have no idea where that rumor started.”

When asked about the possibility of new homebuyer tax credits last weekend, HUD Secretary Shaun Donovan got out of the way of that little question like you’d get out of the way of a Randy Johnson fastball. "We're going to be focused like a laser on where the housing market is moving going forward, and we are going to go everywhere we can to make sure this market stabilizes and recovers." Thanks, Shaun. I’ll take that as a “huh?”

Anyway, the scuttlebutt around the campfire has the scope of this new round of [rumored] tax credits extending beyond the first-time and move-up home buyers of last year, to also include buyers of foreclosed properties and short sales. The impetus for the [purported] tax credit is the stalled recovery of the housing sector. Some have argued convincingly that—excruciating though it would be—the housing market must be allowed to correct itself with no artificial intervention from the government. Only then, the reasoning goes, will the market naturally settle to where it would have been had not the Twilight Zone-esque spectacle of 2003-2006 occurred.

“Nonsense!” say others including Governor Charlie Crist of Florida, the only state along with, perhaps, Arizona that has come as close to Nevada in having been completely laid to waste by the housing collapse. Another tax credit, he opined "would stimulate the economy. It would increase home sales in Florida.” Crist is one of the biggest promoters of this [alleged] tax credit idea, and it points out the dilemma we’re all facing with these kind of bailout schemes. In his case, it’s, “What’s Good For My Specific State vs. What’s Good For the Country in General.”

Me? I’m conflicted, too. The fiscal and economically responsible side of me says, “Enough of this!” Let the housing market take the beating and adjust instead of keeping it afloat at the expense of the future of the economy.

On the other hand, the real estate agent side of me (the one that needs as much action in the market as possible to help keep the bills paid, the kids fed, and the wife still willing to put up with my shenanigans) says, “Hey, let’s roll! Keep those federal sops coming, Uncle Barack!”

Of course, none of this may happen anyway. Whether the housing market is going to be propped up and kept alive by artificial, taxpayer-supported resuscitation, or left to flop around and struggle for breath like a perch on a fishing dock, we have little choice but do as The Man said: “Be not troubled, for all these things must come to pass, but the end is not yet.”

It always amazes me when what I predict will happen actually does happen...

A few months ago I was blathering on about how much easier short sales would be to close in the coming months. Smart bettors wouldn’t have rushed down to get any action on that happening based on my bold prediction. I was, after all, the guy who told anyone who would listen that Argentina plus the points back in ’82 in the Falkland's War was a lock.

But a look at year-to-year July closings in the MLS (not including the cash auctions that take place on the steps of the Nevada Legal News or what few For Sale By Owner transactions are still being consummated) shows that the percentage of short sales as closings rose from 10% in July 2009 to 33% this July. That’s a mighty significant number.

Maybe it has to do with the HAFA guidelines set in place in April. But most agents I talk to are still waiting for their first HAFA short sale to close. Besides, those HAFA guided short sales won’t be closing for a while anyway. So more than likely, it’s just the expedience of the banks finally wrapping their TARP-stained arms around the situation and dealing with it. Whatever the impetus for the growing number of successful short sales, it’s making life a lot easier for a lot of home buyers and home sellers these days. If you look at that white section of second pie, that increase represents human beings whose situations in life just got better because the short sale process was streamlined.

I just closed a short sale Thursday on an investment property for a couple who are starting to build a real estate portfolio to fund their retirement. They’re in their early to mid 40s, so their timing and vision are perfect. I’m proud of them.

And I’ll close this month on a short sale for another couple who are just starting out in life. The house is perfect, and it’s the classic dream come true story.

In both cases, obviously, it’s been a godsend for the sellers, too, because they got to mitigate the damage done to their credit that being foreclosed upon would have had. Times like these make me incredibly happy that I get to do this kind of work for a living.

I doubt that either of these properties would have closed a year ago. So the next time you hear a doom & gloom story about the real estate market here (it’s actually more like crud & mud than doom & gloom), just know that there’s another side to that coin. Nice things are happening for good people. And your ol’ buddy Kenny couldn’t be happier.