Time to get serious about choosing our next president with the election a mere twelve days away. Who are you voting for and why? In my opinion the housing market will be impacted by the plans of who is elected. Based upon their campaign pledges, here is what to expect.
McCain promises not to raise income taxes on anyone, and has proposed corporate, and capital gains tax cuts that will help struggling companies to keep, and hopefully add jobs. McCain promotes more drilling of domestic oil, and the building of nuclear power plants. On taxes and energy McCain will allow you to keep more of the money you earn to be spent as you choose.
Obama famously said last week he wants to "spread the wealth around", with his proposal to raise income taxes on families and small businesses earning over $250,000, and he will redistribute that wealth to 95% of American workers by cutting their taxes. This seems more of a promise being made to get elected than what may occur if elected. The Brooking Institute, the Wall Street Journal and many other studies show the numbers don't add up.
Pelosi and Reid are reported to already have legislation written to rescind the off shore drilling bill recently passed in Congress. Obama says he's for nuclear power if the waste can be properly handled. This is code for no nuclear power plants. The Navy, France, and other countries recycle their waste. This is an empty argument to pacify environmental extremists. Just as we get relief from $4 a gallon gas the supply would be artificially lowered again which would result in a return to higher prices.
Obama also proposes raising corporate taxes, capital gains taxes, and wants to implement windfall profits taxes on oil companies. The only problem is, corporations don't pay taxes with their money, they use yours by raising prices. Higher prices would not be welcome during a financial downturn, it would only make the downturn more intense.
The Obama plan could be devastating for job creation. Although Obama claims over 95% of small businesses won't see a tax increase, that proves to be a false claim according to The Small Business Administration with records indicating over 50% of small businesses earn in excess of $250,000. In 2007 small businesses were credited with adding over 300,000 jobs while big businesses shed jobs. Under Obama's plan taxes would go up on the only sector creating jobs.
The direction of the country, the economy, the value of your home, and the ability to sell your home will be directly impacted by these tax, and energy policies. The socialist wealth redistribution plans of Obama will stifle investment, cause job losses, and seriously reduce tax revenues to the federal government. To raise taxes during a financial crisis does not make any economic sense, it's like siphoning gas from your own tank, and expecting to travel farther.
The current slowdown in our local housing market, and the national housing market would be exacerbated if Obama wins, and it looks as if he may. Any home seller that gets an offer from a serious buyer should consider taking the offer while they have the opportunity.
Both candidates plans increase spending after accounting for their proposed spending cuts, and tax proposals. In other words continued deficit spending. This week congressman Barney Frank said deficit spending would have to take a second seat to new spending, and there are plenty of rich people we can tax later to recover that money. Unconscionable in my opinion, however clearly states the Democratic Party's new plan. Spend then tax.
When you are deciding who to vote for keep this in mind. If Obama wins, and attacks the very businesses that are creating jobs, taxes the rich ($250,000 and up), and promises to give you a tax cut, even if you aren't paying any income taxes; the old saying "if it sounds to good to be true, it probably is" will come into play. It can't be done without causing massive job losses, or raising taxes on more than just those earning over $250,000.
If Obama wins, and Democrats control the Senate, and House be prepared for sweeping changes to the left, and an unchecked power to do as they will. The citizens of Springfield, and of Illinois know the economic catastrophe caused in Illinois as a result of Democrats controlling all three branches of state government. It will occur on a much grander scale nationally.
The bottom line is the housing market will be severely impacted. Real estate is, has been, and always will be a supply and demand commodity. When supply is greater than the demand, the very conditions we experience today in Springfield, Illinois, and across most of the nation, we call that a buyers market. Fewer jobs means fewer buyers. More taxes means less money available to be spent on job growth, job retention, goods and services. Looks like we'll be in a buyers market for an indefinite period of time should Obama win, and implement his campaign promises.
The housing market in Springfield, Illinois, and across the country will not automatically turn into a sellers market if McCain is elected. In Illinois there is a long road ahead due to the paralysis in state government. McCain will most likely be facing the most liberal congress in history, and will struggle to implement any of his plans. That, in my opinion would be better than no checks and balances whatsoever. At least the housing market would have a better chance for recovery.
Fritz Pfister is a licensed Realtor with RE/MAX Professionals Springfield Illinois.
Fritz is a leader in the local real estate market and hosts a live one hour radio program, now in its' 13th year.
Fritz's website is
SpringfieldHome.com Fritz hosts home buyer and home seller seminars that have been attended by hundreds of consumers.
Fritz provides advice that helps consumers succeed in the sale or purchase of homes.