Disregarding A Few Bad Numbers for the Facts

Education & Training with Corcoran Consulting & Coaching

numbersI shook my head as I read a recent Bloomberg news headline: Homebuyer Tax-Credit Extension Fails as Catalyst: Chart of Day that claimed the home buyer's tax credit extension did not result in an upward trend of stock  investors or homebuilders.  Both builders and Bloomberg economist expected to see an increase in the NAHB/Wells Fargo index but the numbers fell from 17 to 16 this month.

Wells Fargo analyst Carl Reichardt is already claiming "The extension has not materially helped traffic or sales despite the program's expansion."

His gloom and doom is misplaced.  Buyers and sellers are enthusiastic about the credit. This enthusiasm will translate into busy sales months after January 1st. By Bloomberg's own figures, housing starts are up 8.9%and building permit figures are up6.9% in November, 2009vs. November, 2008.

There are good reasons why this credit might not have had instant results this month.

Many first timers who were trying to buy in time to take advantage of the credit timed their purchase to be done by 11/30/09. From October 15 till November 6 when the new credit was signed into law,  buyers who didn't think they could get the credit slacked off. Unless many were ready to sign right away, there will be a period of time when buyers in the pipeline are limited.

Repeat buyers may be getting their homes ready to sell, a process they may have just started when the credit was announced.

Though many agents, as well as myself have tried to promote actively buying and selling during the holidays, In reality, many people are busy for a few weeks in December and officially or unofficially put of the project. Increased holiday busyness equates to respite from real estate. This is an age-old trend.

Comments (0)