I bet most of you are like me and a little conflicted over the mixed messages regarding the home real estate market conditions. I stated not long ago that we are supposed to be in a super buyers market, and that, literally, should be the case. However, it is not really a buyer's market unless buyers are buying.
It is true we have seen an upturn in sales contracts (pendings) and closings the last couple of months. This was to be expected due to the tax incentives passed down by the Fed for "first time homebuyers". These were defined as anyone who has not owned a home in three years or more. They have made up the bulk of the gains the market has made this year.
Smoke and mirrors? Possibly. The tax incentive could have been extended to anyone buying a home in the year 2009, regardless of price point, or residency status. In other words, investors could have been incentivised to buy as well, thereby relieving the market of more of the previously foreclosed properties. With that inventory reduced, more people that were desiring to move up, could have sold there existing homes a lot faster, and made that next purchase possible. This would have really helped the home builders who have had to lay a lot, if not most, of their labor force off.
As I said earlier, indicators say we are bottoming out of this real estate recession. Maybe. My concern is that the stimulus measures are not going to work fast enough to turn the tide of rising unemployment, and this recovery will begin to reverse itself before it really has solidly begun.
Let's hope the administration is not sandbagging these stimulus funds until it can serve them in 2011-12 to assure re-election.
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