Real Estate Market to Benefit from Stimulus, Says Motley Fool

The Motley Fool says developers' stocks are rallying, and they predict that the stimulus package will also mean a recovery among realtors and mortgage brokers.
February 10, 2009, 1pm PST | Tim Halbur
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"By the time you read this, the dueling proposals from the House and Senate may meet in the middle. The House is proposing a $7,500 tax credit for first-time homebuyers under a certain income threshold. The Senate upped the ante last week, opting for a $15,000 tax credit available to all house hunters.

Regardless of the size and scope of the credit, it will clearly be a winner for the real estate industry if it passes. The market may initially hop on homebuilders as a logical beneficiary, but I suggest you look elsewhere.

After all, there is already a glut of existing homes, fetching prices that new construction is unlikely to match. There will be a flurry of activity if the housing stimulus passes, but it existing homes in developed neighborhoods will likely benefit the most. If last year's spike in gas prices and the current scarcity of jobs have taught us anything, it's that long commutes from the suburbs are no match for being right in the middle of the action."

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Published on Tuesday, February 10, 2009 in The Motley Fool
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