With the coming of April 30, 2010 the home buyer credit will sunset (if you aren't already in contract). Many predict doom and gloom for the real estate market when this program expires; will there be life after the credit?
I for one don't feel that the market will drop off a cliff on May 1. There will be a drop in first time home buyers entering into the market, but those that are looking will continue. Buyers that were contemplating entering the market will have already jumped in, the credit expedited many time horizons for buyers. So what do I think will be the likely effect of the end of the credit?
The most likely response will be a mild downward pressure on prices. Home buyers who missed the credit will try to get homes for a little less then they would have with the credit. The result will be lower overall prices with some softening in demand, due to the April rush to get into contract on something, anything in order to get the credit.
In conclusion, while the expiration of the credit will be a psychological blow to an already jittery market, the actual effect will be much milder than some are predicting. The relatively positive news lately on the economy and employment should act as somewhat of a counter balance for the housing market. We will be able to not only survive, but should begin to thrive again as the country's economic recovery gathers steam.
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