The TV news shows are abuzz with how house values have gone down relative to same month prices from last year. “Economists are puzzled,” they say.
Maybe they should ask a Realtor! Remember the $8,000 tax credit that propped up values last year? Realtors remember. Realtors run comparable market analyses all the time for clients and know that there was a mini buying frenzy in spring 2010. In the first 2 quarters of 2010 buyers rushed to buy houses to get $8,000 cash back from the government.
What Has Changed?
- In 2011 that incentive does not exist. It did in 2010.
- Did sales precipitously drop right after the $8,000 giveaway expired, proving the brief mini-stabilization of 2010 was artificial? Yes.
- Should that factor into the Year-Over-Year analysis? I would think so.
- Is this the only factor? No.
- Should it be considered? Yes.
They Have Whiz Bang Technology - They Must Know It All
Pundits stand in their studio with holograms and charts that hang in mid air. With a touch of a finger they make graphs spin around like genies escaping from thousand-year-old lamps. Everyone is mesmerized by the Star Trek technology. Wow, the pundits must really know what they’re talking about.
Oh, but did they factor in the $8,000 tax credit that expired in 2010? Did they mention it? Do they understand its impact on pricing? Do they even know about it? Realtors do. Hey give us a call; we may be able to give you a report from the front lines.
Maybe the tax credit issue is too complicated to get across in their 60 second sound bite.