I made a case last week for expanding the first-time home buyer tax credit to include investors. But a couple of Tampa Bay Realtors made an equally valid case that my position was wobbly.

Most interesting was a response from a Realtor at Prudential Tropical Realty. Investors don't need the subsidy, she said. In Tampa Bay, they're already outbidding first-time home buyers on short sale homes without the help of the government. Giving investors an extra $6,500-$8,000 would tip the scales even further to cash buyers.

The main reason I disagree with your rationale is that in the past month, I cannot get my first time home buyers (under $150K) under contract to save my life.  Every offer I write goes to multiple offers and my little buyers, most using FHA loans, are getting beat by cash or better-financed loan buyers.  It is really frustrating for all of us.  So the last thing we need with the extended time to close the first time buyers and have them get their tax credit is more competition on the limited supply of quality properties in their price range.

Good point. But isn't this good news? Cash buyers are offering more money for a limited supply of homes. That means the market believes some homes are undervalued. Won't that give home prices some needed loft?

The Realtor is frustrated that her deals - and her commissions - are falling through. Understandable. But this offers more evidence that Tampa Bay home prices hit their bottom in January and have nowhere to go but up.