In November of 2009, I wrote a blog post entitled Was the Tax Credit Extension a Good Idea?

Here is an excerpt:

In my opinion, tax credits have become subsidies distorting the real estate market. I believe that any further extension or expansion of this program, with the exception of those benefits due our military, will be counterproductive. I say it's time to help homeowners. Figure out how to give them $8,000 so that they don't have to sell as a short sale. There are a lot of well loved homes in excellent condition that would make ideal homes for new buyers, creating move up buyers for other homes, that can't be sold now because the sellers are upside down in their mortgages. A short sale may benefit a new buyer, but it eliminates another (for two years at least). Why not consider helping sellers with a monetized tax credit so that they can sell their home at market value, stop or minimize short sales and foreclosures eroding property values, get buyers into 'non-distressed' homes and turn that seller into another buyer, thus propelling the market forward.

Here is what I am experiencing today:

I have received numerous requests through the holidays for market evaluations from homeowners who either bought, or refinanced, during the past 3 years. What I'm finding is that the value of these homes is almost as upside down as those of homeowners who bought in 2006-2007. Artificially inflated home sales prices, driven by subsidized demand, and used by appraisers to substantiate further inflated home sales prices, is setting the stage for Round 2 of the Great Housing Crisis. Not only will the various homebuyer tax credits burden the Federal budget deficit for years, we have now created a situation where the same homeowners who benefited from $7,500 - $8,000 in 'cash back after closing', are going to be in the distressed property boat along with everyone in the coming tide of foreclosures. Good luck getting THAT money back.

The solution is simple stated. It's about jobs. Always has been and always will be. How to create those jobs should be the domestic policy focus of 2011. Ideas?