Woohoo! The tax credit was extended for three more months! Kinda, sorta, but not really at all. They just wanted to get everyone’s hopes up.
The extension will not help you if you are going to purchase a home in the next three months. The extension is only for buyers who were already under contract by the April 30 deadline, but who were in jeopardy of not closing the deal by the June 30 deadline. The AP reports that 180,000 homebuyers were expected to miss the deadline.
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The Chronicle runs a not so interesting article in today’s business section:
An indicator of where the housing market may be heading dipped in May, a sign that the effects of a federal tax credit are starting to fade.
Pending sales — those listings expected to close within 30 days — fell 17.8 percent from last year to 2,991 for May, according to monthly data released Tuesday from the Houston Association of Realtors.
I love when the analysts analyze the obvious. Everyone and their dog knew that once the tax-credit expired that home sales would drop off for a short time. How long is what they should be analyzing. It’s sort of like the weather-man telling you that it’s already raining- thanks Captain Obvious; I want to know when it’s going to stop.
Buried in the article is that May home sales were up 19% over last year and that sales of homes in the $80k to $150k shot up 28%. The median home price did fall about a percent and a half to $154,780. I’m no statistician, but I doubt that’s statistically significant.
Overall the phones are ringing a little less and the homes are selling a little slower, but the market hasn’t come to a stand still. I’m betting that the market is going to be just fine as people relocate through the summer. This fall and winter is where the experts are expecting the market to bottom-out. If there’s anything the analysts should have learned by now it’s that the real estate market is cyclical.
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