The Real Story …
News and commentary about the real estate market and related topics.
Dave Parrish, ABR ®, CRSA, CSP, GRI, ePRO ®, REALTOR ®, RealtySouth
The opinions expressed here are my own and don’t necessarily represent those of HomeServices South.
What’s Next…
Well it’s official the Tax Credit Program for First –time and Move-up Buyers has ended… except of course for active duty service members who have until next April 30th to take advantage of this windfall program. The big question in everyone’s mind at the moment is: What’s next?
Now make no mistake about it… I have no perfect crystal ball that allows me to see clearly and without a doubt what the future holds… However, I do live and breathe this market and do have some insights into what is currently happening in the market, what is likely to happen in the near term.
While there are many critics of the just “completed” Home Buyer Tax Credit Program there are a couple of observations I would like to make. It is certainly true that for the most part this tax credit moved sales up (robbed sales from the near future): however, it also created an interest in looking at the real estate market again, which is not insignificant. The fact of the matter is that this is a great time to buy… make no doubt about it. The purpose of the tax credit was to overcome the inertia of fear created by the economic disaster that came into public awareness in October of 2008. To that end, I believe it may have been successful; although, it certainly wasn’t the full answer to the issues in the real estate market.
As a direct result of the tax credit program and the fact we are in the selling season, March Sales were robust, as will be April, May and June sales, with May probably representing the peak of “closed” sales caused by the Tax Credit.
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As previously stated, I believe sales will trend a bit lower than average this summer, as foreclosures continue to hit the market at an increasing rate… Remember: foreclosures are the result of bad things that happened 9-18 months ago… Prices will continue to trend downward for two major reasons: First, the pressures caused on the appraisal process dictated by the HVCC (Home Valuation Code of Conduct) and secondly, because of the weakness of the market in the above $250K market.
As we find our footing in the regulatory arena, specifically in the area of the appraisal rules and processes to a more neutral position (This writer’s opinion is that the pendulum has swung too far to the right in efforts to correct some of the base causes of our current economic woes), we should begin to see some very gradual and subtle strengthening of housing values/price. It will take this movement to create activity in the above $250K market.
However, I believe the upcoming changes in FHA regulations could create a moderate amount of energy in the buying market beginning late this summer, as prospective purchasers return to the market and desire to act in front of less favorable financing alternatives.
All things considered, I am consulting with my Buyer clients: buy now …for my Seller Clients ,unless you’re planning a move up, I advise holding tight for better days, unless of course they have some over-riding reason to sell. Those better days are coming … within the next 18 – 24 months.
