We are currently suffering the hang-over from the economy-altering drug of the extended first-time homebuyer tax credit. This simple chart shows average sales activity over the past fifteen years and charts each of the last four years directly.
The navy blue line shows the average rate of sales for single family, detached homes in San Diego. Error bars show a 1-sigma standard deviation (essentially, everything between the high and low of the error bars can be considered normal). The seasonal bias of homebuyers is clearly evident with about a 33% increase from the lull of the winter months to the height of the summer.
2010 activity is described by the purple line. Early in the year, it seemed to track the pattern of the average albeit at an 85-90% level. But then we see a spike for June - coinciding with the planned expiration of the tax credit. This is then followed with a major drop in July.
OK, so this is no surprise to anyone who thought about the consequences, but the pull-forward results are clear to see. I am more interested in seeing the results for next month, to see whether or not we "snap back" or drop below normal behavior - despite the best interest rates in 50-years.
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