FED TAX CREDIT AFTERMATH
The aftermath of the Fed tax credit, which expired April 30th, won’t be completely known until the end of June. Although the tax credit expired at the end of April, when buyers needed to be in escrow, buyers have until June 30th to close the sale.
The effect of the tax credit was complicated by the new state tax credit which started May 1st. Many buyers delayed escrow so they could take advantage of both credits, stealing sales from April, down 22.5% year-over-year, and pushing them into May, where home sales were up 14.4% year-over-year.
Pending home sales, goosed by the tax credits, continued to be near record highs at 349 units. We expect home sales to be strong in June. The median price for single-family, re-sale homes edged upward in May by 1.5% from April. It was up 19.1% from last May. This is the ninth month in a row the median price has been higher than the year before. Although inventory grew 13.4% from April, it was down 2.5% year-over-year. This is the twenty-fourth month in a row inventory has been lower than the year before, putting upward pressure on prices.
The sales price to list price ratio clocked in at 98.8%, higher than any month since May 2006.
ARE WE THERE YET?
If the previous numbers don’t convince you the real estate market in Santa Cruz County has bottomed out, let’s look at some other statistics.
First, foreclosures levels: they dipped by 2% in April year-over-year for the San Francisco Bay Area. That's the first annual decrease in more than five years, according to report issuer RealtyTrac.
Second, investors: they’re back in the market, at least on the low end. Many are buying properties being auctioned off on the courthouse steps as the banks have finally realized it’s cheaper to get a haircut there, than going through foreclosure.
Third, Case-Shiller Home Price Index: often considered the gold standard for real estate statistics, the index for the San Francisco Bay Area was up for the eleventh month in a row, according to their latest statistics reported for March 2010. I expect when they report on April and May, we will see the index continue rising.
STATE TAX CREDIT
Just a reminder that the new state tax credit is not limitless, as was the Federal tax credit.
The state tax credit is limited to $200,000,000 and is first-come, first-served.
For full information, go to: http://www.ftb.ca.gov/individuals/New_Home_Credit.shtml Remember, the real estate market is a matter of neighborhoods and houses. No two are the same.
For complete information on a particular neighborhood or property, call me.
Susan Grant, REALTOR, CDPE, SFR DRE
www.SantaCruzAvoidForeclosure.com
www.SusanGrant.biz
(831) 247-9140
David Lyng & Associates, 129 Water St, Santa Cruz, CA 95060
License #01331769
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