Saying Goodbye To The Tax Credit
In this edition of Tuesday Morning Coffee Murfreesboro TN based Realtor, and owner of John Jones Real Estate, John Jones speaks to the expiration of the $8000 First-Time Homebuyer Tax Credit and discusses what he forsees ahead in the Rutherford County real estate market and local economy.
JOHN: Hey, John Jones here with another edition of Tuesday Morning Coffee. Guys, we’re winding down on the tax credit, and I wanted to speak to that a little bit. The tax credit is running out this week on the last day of the month. So really, this is our last week for it. If you’re hanging out there waiting on something to find, this is your last week to get the $8,000 if you’re a first-time homebuyer and the $6,500 if you’ve lived in your previous home for five years.
So what has that done to our business? The last couple of weeks have been pretty crazy. I told somebody the other day it feels like 2006 again, and it has for the last couple of weeks, which is good. What’s going to happen after this tax credit? A lot of people are asking. Well, I can tell you this. The tax credit hasn’t had the impact that Congress thought it would have. So therefore, I don’t think it’s going to be extended. I don’t even think there’s really any serious talk about it.
But what’s going on in the economy overall—I’ll tell you a few things I’ve heard this week that have really made me get kind of excited about the economy and where our country is heading. The first thing, I sat down with my stockbroker. We were reviewing my 401K and he told me that what he was seeing in corporate America in the Dow Jones stocks is companies were reporting better earnings. So companies are making money, which is a good thing.
Now a lot of that has probably been due to some downsizing and cutting expenses as we’ve had to tighten our belts the last couple of years, but that’s cool. Those companies gotta make money before they even think about adding more employment. So that’s the first sign. They’ve gotta make money, and that’s happening. Another interesting comment I had—I have a real good friend of mine who owns a tool and dye business. They make dyes for cardboard boxes. So when his business is booming, that means that the cardboard box business is booming, which means people are buying things off the shelves, whatever can come in a box that you can imagine.
His business has started to trickle up since December, and he said he’s very cautiously optimistic but feels very good about it. Ever since December, things are looking better for his company. The same day, I talked to a guy in the transportation business, a past client of mine who’s in with a big trucking company, large, over several states. They do a ton of business, a very large company. And he said since October of ‘08 to December of ‘09 his company had hit a little bit of a decrease every month until December of ‘09 when they had their first increase again.
It was only 3%, but he said the next month in January it was 10%. February it was 15%. March it was even a little higher. And he says, “John, we transport everything. Any consumer good, tires, toothpaste—whatever you can imagine, we transport it.” Which tells me, tells him that this economy is slowly coming back. A guy made a good analogy the other day about our economy, and I agree with it. He said, “It’s kind of like a marathon race.” You know, in a marathon race you have thousands and thousands of people—we just had one here in Nashville—that are running.
And a lot of times the leaders or the best runners leave the finish line and it may be another hour or so before somebody else leaves or you could be in the back of the pack before you actually take off. I think our economy is a lot like that. I think the lead runners are out there and it’s started. The race has started. But some of us are still standing at the starting line. It’s going to take a while. So I think that our economy is coming back. I think that real estate is still definitely a buyer’s market.
But I do think the economy is on its way back, which means hopefully more job growth, which ultimately means housing will come back because people can buy houses when they have jobs. Anyway, I hope that helps you. That’s my two cents. And if you need us, call us or visit us at JohnCJones.com.