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The Housing Market After April 30: Going Up or Going Down?

By: Conrad Neuf , Contributing Writer
In: Old Houses, Old House Musings, In The News
South Carolina Old House Built in 1832, Will It Sell By April 30?

Will This Old House Sell By April 30?

I wrote a few blog posts about the housing market at the beginning of the year, and with the First Time Home Buyers tax credit about to expire, I thought I would touch on it once more. The housing market as a whole has quite an effect on those of us involved with old houses. It affects old house enthusiasts who have restored a house and hope to sell it, and it can also help or hinder a family hoping to purchase their first old house. However, the housing market touches other areas as well, such as the prices of building materials, and the availability of certain construction-related items. The health of the housing market can even affect the costs of restorations and repairs done by contractors on old houses.

The Tax Credit Appears to Have Been Beneficial

The First Time Home Buyers tax credit extension appears to have helped the housing market. Purchase agreements signed in February caused an 8.2 percent increase from January, the second largest increase on record. A Kansas article reports that through mid-February, 1.8 million people have taken advantage of the tax credit in 2008 and 2009, and their tax credits total 12.6 billion. That’s a pretty sizable amount of credits buyers are receiving. Prospective buyers know they don’t have much longer; the credit runs out April 30. Anyone wanting to take advantage of the credit must have a signed sales agreement by April 30, and close on the home by June 30. A Buffalo, New York, article reports that realtors are working twelve-hour days trying to find houses for anxious buyers, and buyers for available properties.

What’s Next for the Housing Market?

The big question is what happens after April 30? The spring buying season is traditionally good for selling new and existing homes, and then it drops off slightly as families go on vacation and are busy with summertime activities. The tax credit will have expired, and the federal programs holding down interest rates are also running out. Mortgage rates are headed upward: USA Today reports that home buyers are rushing to purchase before rates rise too much, and they can no longer afford to buy. I don’t know how much of that is true–it seems to me that tighter credit standards and required down payments are keeping more people out of the market than the slight rise in interest rates.

Of more concern is the next wave of foreclosures the Washington Post is reporting. There could be as much as a three-year supply of foreclosed houses coming back on the market, and if that happens it could be very bad news for housing. These are not sub-prime loans defaulting–supposedly most of these foreclosures are families who have had financial difficulties or job loss due to the economy–which goes back to what I have thought for the last year. The housing market will not show any sustained strength until unemployment gets under control.

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  1. 4 Responses  to “The Housing Market After April 30: Going Up or Going Down?”

  2. Caroline
    Aug 29, 2011
    Of course housing will continue to go down. Our jobs have gone overseas and millions of outsiders who have no right to be here have OUR jobs in OUR country. How can Americans keep their homes with no work???? Good jobs brings demand for housing. There are very few decent jobs Americans can suvive on and meanwhile refugees from the most horrible countries in the world are being cremmed in here to replace American workers. WAKE UP FELLOW AMERICANS!
  3. Jason
    Aug 29, 2011
    One problem that is going to keep the housing market in the dumps for a while is the banks tight standards on lending. Lending institutions have gone from lending too much money to the wrong people, to now lending no money to anyone. This is why real estate runs in a boom bust cycle.
  4. Fred Sweezer Sr.
    Aug 29, 2011
    Keep Training first Time Buyers and you will have a lot of interest in the market for buying a home even after the tax credit is gone, some of the tax credit money went people that just found a loop hole in the system and claimed the credit without even purchasing a home! which slowed the process for the honest first time buyer, there is a needed to keep reaching out to the first time buyer and educating them.
  5. James
    Aug 29, 2011
    Read and article this morning saying that most houses that have been in foreclosure are seeing a lot of the tenants moving in with friends/family so they aren't renting let alone buying. Still a good time to find a great rate and talking Realtors down...they are begging for your money.