May 1: The morning after. Homebuyer tax credit expired. Now what?
May 1 is May Day. Could be an appropriate thing to say the day after the homebuyer tax credit expires, don'tcha think?
So here it is... Life after the homebuyer tax credit. For about two years now we've had this artificial economic stimulus at work in the housing market. Some say it helped the housing market avoid a complete collapse. Others say it was a waste of money, and simply moved up Americans' home purchases by a few months. And there's no denying it generated activity in the market. But in just a few scant hours: *poof!* it's gone.
A few weeks ago we reported on an unscientific Washington Post poll gauging public opinion on what will happen to home values starting today. Two thirds anticipated that we're in for a dip.
What do you think? What happens now? It's the topic of our upcoming July/August Commonwealth magazine.
Leave a comment. Say something interesting and we might call you for an interview.
(photo credit. oh, and don't worry: that's a model plane)
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I don't believe we'll be able to gauge the real impact the last stimulus has had until sales are recorded after June 30th, the closing deadline for the program.
I would expect to see sales figures up for the months of April, May and June as a result of first timers taking advantage of the incentive and also because of the typical seasonal sales increases.
If those figures aren't up then the program didn't have much impact despite low interest rates, high inventories, and sellers willing to negotiate.
I'd expect that any impact provided by the program will be seen in the lower prices ranges as properties above $300K or so in our market were not affected much by any of the three versions of the tax incentive.
If the number of sales in the lower range are up it could indicate that most of those eligible first time home buyers have stepped up to the plate and that there aren't any more left on the bench to play. That won't be a good sign unless something motivates the rest of the potential buyers out there to make a move. Many are taking a wait and see attitude as far as the economy is concerned despite having the same market incentives that attracted their first timer peers to act.
Regardless about what any of us think about the propriety of the stimulus, it did positively affect the markets. Imagine what sales figures would have been like without it. If you can do that then you may have an insight into what the future may hold even if we do have a decent sales report for the spring and summer seasons.
With a glut of high end properties on the market come Fall I wouldn't be surprised if Congress considered another and even higher priced tax incentive so as to motivate buyers looking for more expensive properties. Nothing would surprise me at all.