Impact of Tax Credit and Looking forward

ScottR · Chief Bottle Washer Joined: Feb 11, 2006 Posts: 110

With December sales data well in, and people realizing their tax liability to Uncle Sam, we are beginning to see signs of first time buyers back into the market after a 'break' in December.

Looking back at the sub 200k market:
http://www.scottroh.com/foxvalleyhomesaledata.htm

It is easy to see how the impact of the perceived expiration of tax credits had an impact on our local market with the dramatic decline in December for the same price point.

Considering the 'more responsible lending' guidelines going into effect, one hopes the footing is improving.

Encouraging too was the December sales for the 200k-400k market which surely was in part a response by 'move-up' buyers that had been able to sell in November at the lower price point.

Showing requests continue to climb as we get further away from January 1, and I am happy to report my busiest January in the past 5 years. February has begun equally strong with evidence of potential impact of the tax credit 'expansion' to existing home owners.

Granted this is all tied into consumer confidence and jobs, but with the suggestion of normalization in our language and no longer "Henny Penny the sky is falling by banks" there is comfort stirring.

Yes, there are likely to be some 4 million more forclosures to muddle thru nationally, and muddle it can be, but at least those are closer to being identified. The continued supply of these foreclosures will be a drag on prices with demand predicted to decline nationally.

Short sale homes listed within the market can be challenging as buyers lose patience with lenders unable to respond to real offers in a timely fashion. Just this week I had buyers refuse to place offers after learning vacant homes were in short-sale status.

The best priced homes still sell first and allow both the first time buyer and seller to take advantage of the current credits, creating more jobs in the process.

I'm not a buyer of LOWES or Home Depot yet, but with all the rehab that will have to be done on homes that were not taken care of I will be watching employment levels over the course of the next 18 months and maybe I will be.

January sales are not yet fully in for me to document yet, but with as busy as I am now I will be happy to post them when I can.

Scott R