Sunday, August 16, 2009

The oncoming Q4 surge in home sales

Are we going to see a surge in home sales at the end of the year? With the tax credit expiring, that is effectively an expected increase in the price of a home (all else equal). Hmm...I am a first time homebuyer (I personally am not, but let's use the abstract version of "I"), the news about the economy is "less dire more hopeful", and I see a subsidy expiring. What do I do? The LA Times is advising you to get on the ball, and buy that home before November 30:
Reporting from Washington - First-time home buyers had better get a move on if they hope to take advantage of the $8,000 federal tax credit. The window of opportunity is closing rapidly.

To qualify for the credit, any transaction involving a first-time buyer must close before midnight Nov. 30, when the valuable tax benefit expires. And because the buying and lending processes can be slow, you're going to need every bit of that time to close escrow.

Although the end of November might seem a long way off, Diane Dilzell, president of the New Jersey Assn. of Realtors, rightly points out that it takes weeks, if not months, to manage the logistics involved in a real estate transaction. It's also important to realize that any of a number of things can go haywire along the way.
Will we see a big surge in November existing home sales? Possibly - even likely - that certainly is not a "seasonal" thing.

Rebecca Wilder

4 comments:

  1. No historical basis exists for end-of-year increases in cash renting contracts (mortgages) under any scenario.

    House buy-sells and cash renting contracts to support such transaction show historical correlation to elementary and secondary school years within the various states.

    Foreclosure rates in nearly all counties of all states continue to rise.

    Net formation of consumer credit and long-term personal cash-renting credit (mortgages) continues to fall.

    Real income continues to fall.

    In short, not a piece of legitimate economic transaction proof exists for any belief that Americans shall take leave of their minds and rent cash in the form of a mortgage contracts by year's end in which anyone would consider it a "surge", "spike" or another word of rhetoric.

    Moreover, no proof exists that would lead anyone to believe that bankers would take leave of their minds and rent cash to a mass of borrowers, most of whom lack the means to repay.

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  2. We recently released a report on the the Manhattan Condo Market. Based on the rolling average of sales from July 2008 to July 2009, we concluded that sales activity will increase and property values will adjust upward. Real Estate is three things: Cyclical, Seasonal and Emotional and we approaching the tail end of this three-he
    aded cycle we are involved in. Although home absorption will take some time, we are starting to see some stability in certain markets; As long as real estate remains local.

    http://accuriz.com/RealEstate_Reports.aspx

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  3. The following represent provisos, not recommended market posturing whether by direct construction or by implication.

    Remove an economic input that increases the after-tax value of a property, watch the increase get eliminated.

    I can certainly understand the Obama Administration's having acted to staunch the bleeding inherited from the preceding Administration, nonetheless.

    Also, the dynamic is suggestive of IPO's, stock splits, secondary offerings in equities. Many find buying from the selling crowd means waiting for the reaction after the perceived advantage has passed.

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  4. For full context relative to my own
    view of the residential market, here's my homepage:

    http://sites.google.com/site/evernewecon

    ReplyDelete