Housing Market Recovery: The Great Economic Deception

It is part of the great economic deception. The spin machine is in motion with great news on our comatose economy. Home sales are up. But the numbers do not reflect what is really going on in the market place.

For one thing, it's still all about, location, location, location. Places like New York were not as hard hit by the foreclosure epidemic as Florida and California. The areas that reaped the greediest reward from the boom years, are paying more dearly for it now.

Regardless of the location, home sales are still being bolstered by artificial means; namely, government tax breaks for buyers.

As of now, "The Worker, Homeownership, and Business Assistance Act of 2009 has extended the tax credit of up to $8,000 for qualified first-time home buyers purchasing a principal residence. The tax credit now applies to sales occurring on or after January 1, 2009 and on or before April 30, 2010. However, in cases where a binding sales contract is signed by April 30, 2010, a home purchase completed by June 30, 2010 will qualify."

To make the government offer even more tempting, there is "a tax credit of up to $6,500 for qualified move-up/repeat home buyers (existing home owners) purchasing a principal residence after November 6, 2009 and on or before April 30, 2010"

So if you still have a job and your credit is still good, or better yet, if you have cash you don't know what to do with, why not buy that $400,000 dollar house that now carries a price tag of only $150,000?

However, it will still take more than tax breaks and bargains to bring the housing market back to life. And you can sum it up in a word - jobs.

As long as there are 15.4 million people out of work, and millions more wondering if they will soon be out of work, the housing market will continue to plod along on the back of a tax break.

And when the government ride is over?

No one wants to think about that right now.