According to the National Association of Realtors chief economist Lawrence Yun, “In the months immediately following the expiration of the tax credit, we expect measurably lower sales. Later in the second half of the year, and into 2011, home sales will likely become self-sustaining in if the economy can add jobs at a respectable pace.”
This is GREAT news for home buyers who didn’t, or weren’t able to, capitalize on the tax credit. With sellers newly motivated from the decrease in Buyers, deals should be prevalent for a short period of time.
Three factors add up to a Buyers Perfect Storm. First, the number of sales of previously owned homes are still low, but expected to rise 4.3% in 2010, and more importantly NAR is projecting a median sales price increase of 2.7% in 2010, and 4.3% in 2011. Second, mortgage rates are expected to rise from 5.3% to 6.0% by early 2011. Lastly, the sudden decrease in Buyers from the tax credit expiration should give Buyers the edge to negotiate prices.
Conclusion: Buyers have a short window to capitalize on current market conditions. They should have confidence that home prices have hit bottom and are set on a path of modest recovery in the foreseeable future. Sellers able to wait a bit longer will soon be seeing increases in housing prices.
Dan Asleson
Broker/Owner
HALO Properties and Management
www.HALOmn.com
