Uh oh, the tax credit has expired! Now what?

Sure does bring about an interesting debate, both nationally and locally. As I’ve mentioned before; the media, leading economists, and seemingly anyone else with a microphone or pen try very hard to nationalize the real estate market. Often you will see the national foreclosure rate cited or the national rate for the average drop in sales price, but the real estate market is a local market, strongly influenced by the local economy, job availability, and of course location.

Look no further than the communities scattered around the “curve”. Certain spots are sizzling and by spots I literally mean blocks or neighborhoods within a municipality. We have seen multiple offers, escalation clauses, 25+ showings per home and homes sold in one day in these neighborhoods. While in other areas, just 5 minutes away there are homes priced under $300,000 that just sit. Just goes to show you how much really goes into a buyer’s decision to purchase.

Back to the expiration of the credit, what is going to happen? Let’s start with some theories that are out there on the street.
One prevailing thought for our area and the one I tend to agree with is the idea that the credit simply “pulled” buyers into a tighter timeframe. In other words, we had the same number of buyers looking to make a purchase this year. They all just made their decision before April 30th. Based upon this theory, I would expect to see a little slower pace through the rest of the spring, but in the end (end of year) the numbers will be consistent with an “average” market.

What happened here in our community? April of this year, there were 30 new units listed compared to last April when there were 19 units listed. This is over a 50% increase in the number of homes put on the market this year! Wow, so it does go to show that the credit sure did spur us along!

That being said, I think we’ll see things balance out a bit the remaining months of the “spring” season. I’ll be sure to keep you up-to-date. Exciting times for sure!

— Matt Mittman of 19428Homes.com.