Below is my summary after some study today. Comments are welcome.

Right after CA passed this bill, now all builders in CA advertise that you will get $18K tax credit for buying a new home.

First, for many people, you are not qualified for $8K federal credit.

Second, you may not get anything from $10k CA credit because CA allocates only $100M “lottery” for this (first comes and first serves, so hurry!!).

Now the question is why the CA government passed this bill? It does not only try to help builders but more to help the CA government itself:

Builders have loans to be paid for lands purchased from government

New home buyers will pay property taxes which are easily > $10K over three years

Will it work? Yes, it would work ONLY if the economy and housing market would be stabilized soon. Otherwise, some of these new homes (after purchased) will be back to market in 1 or 2 years, and further drag down the housing market, and prolong the housing problem. In this scenario, it will create a similar crisis to “sub-prime mortgage”.

A fellow American made a comment on this: “Sometimes I think everyone in CA is smokin\' something. Just stop the insanity!”.