The government enticed millions of Americans to buy new homes in 2009 and 2010 with credits of up to $8,000.
It turns out this was a trap.
Home prices fell last month 4.4% year-over-year, according to data released by Zillow. The average home has lost around $14,500 in value — nearly twice the maximum tax credit.
The biggest losers? Step forward all those who took up Uncle Sam’s $8,000 bribe and rushed out to buy a new home in Santa Barbara, Calif. You have already lost $50,000 of your $440,000 investment. And that’s even counting the $8,000 bribe!
Others who are already down more than $30,000 include home buyers in places like San Francisco, Seattle, Flagstaff, Ariz., and anyone who bought down the road from the underground bunker of MarketWatch’s own Paul “The Road” Farrell in San Luis Obispo, Calif.
Oh, and check out Carson City, Nev. The typical homes only cost about $190,000, and even after counting the $8,000 credit you’re already down $8,000.