Buyers know that the home buyer's tax credit deadline is approaching.  It is obvious by looking at the sales contracts signed in August.  There were more contracts signed in August than any other month this year.  This has caused 7 consecutive months of increases in pending sales, which is a great sign.  

The homes that went "under contract" in August should be closing in October or November, just before the Nov. 30 deadline for the $8,000 first time home buyer's tax credit. 

Some may be trying to take advantage of this deal even now but many will be disappointed when the closing deadline isn't met.  Stricter appraisal standards, delays getting a mortgage and complications associated with short sales are going to keep some from their $8,000.

In fact, some deals are not going through at all possibly causing a pending sale to be counted twice when a home has to be put back on the market and sold again.  This could be inflating the numbers.

We may see a sharp decline in home sales once the credit expires so extending it could avoid another disastrous down slide. The government is thinking about whether to extend and expand the tax credit.   Expanding it to all home buyers could really rev-up the market! 

http://money.cnn.com/2009/10/01/real_estate/August_sales_contracts/index.htm?postversion=2009100110

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