I realize this is a coin site, but investment is part of it. Let's get financial

Well, I've been thinking about the economy, and how can I not. Deficits through the roof, the money supply tripled in just one year. Business' bailed out and held up with crutches. As this is a blog, I intend to let it out, if you disagree, that's fine.

The topic I've been thinking about is real estate. In particular, the first time owner tax break. I don't know how much it is, but I think it is either $6000 or $8000. I also understand that it ends at the end of April. So, did the tax break help real estate? I think it did, but with crutches.

Inflation priced, houses are still very expensive. It appears that instead of letting free markets manage themselves, by letting over priced houses fall to a level that is reasonable on a historical basis, the prices have been propped up with tax breaks.

I don't understand the idea of saving $6000 to $8000 in taxes buying a house that is $40,000 overpriced. Where is the savings in that. A prediction....when the tax incentive expires, if the economy doesn't pick up (read that as employment increases) house prices will continue to drop. After all, most people have taken advantage of the tax break and the prices haven't really dropped as much as they should have. With the economy as it is, the price of houses should be lower then historical norms, yet they are still above historical values. What will happen later this year when less people are buying houses? Will the prices fall or will the level off to where they currently are at, or will the continue to go up? My guess is that they will continue to fall, if the market really is free regulating.