The best time of the year for housing sales is traditionally the summer but the summer of 2010 continues to be a dud. The Homebuyer Tax Credit which expired in April is having a significant impact on sales which even interest rates approaching 4.5% can’t seem to help.
As you can see from the chart above, not only are sales down dramatically from April, they are down 40% from 2009. As was pointed out by the Minneapolis Association of Realtors:
The effect of the tax credit is becoming clearer with time. March and April enjoyed record-breaking performance at the cost of June and July (and possibly continuing into the future). In other words, the credit shifted would-be summer buyers forward. There aren’t enough buyers left to sustain March and April sales figures. A short-term demand spike was created at the expense of long-term market stability.
“It is somewhat puzzling that demand is this flimsy considering interest rates are at 50-year lows,” said MAAR President-Elect, Pat Paulson. “Until macro-economic indicators such as unemployment and job churn improve, the housing market isn’t likely to make large strides.”
Houses are selling but the pressure to be priced right and have a home that shows well continues to be of paramount importance.
