Reinflating the Bubble

| Fri Apr. 30, 2010 10:58 AM EDT

The LA Times reports on the homebuyer's tax credit:

Buyers can get a tax break of up to $8,000 for first-time purchasers and $6,500 for some current homeowners if they reach agreements by April 30 and seal their deals by June 30.

California lawmakers sweetened the package last month by passing a $10,000 credit that kicks in Saturday. Now, some buyers in the state can qualify for as much as $18,000 in federal and state tax relief if they time their purchases just right.

Seriously? California, which is in only slightly better fiscal shape than Greece, is handing out money to homebuyers? Jeebus. So how's that working out?

The dual incentives have created a mind-set reminiscent of the bubble years, particularly among first-timers, who stand to gain the most money. "I am looking at properties almost constantly, and it is just kind of a feeding frenzy right now, which frustrates me," said Zeenath Shareef, 30, a Venice Beach renter and finance director for a Santa Monica consulting firm who took half days off to look for a home.

"In my mind, properties are going more quickly, and in some cases for more than what they would normally sell for, because people are in such a rush to buy ahead of this deadline," she said. "I hear people saying, friends of mine saying, ‘I have to buy, I have to buy, I have to buy.' "

We are a nation of idiots.