Home » Advice and Guidance, Buying & Selling A Home, Economy & Housing Bubble, General, Generational Selling, International Real Estate, Real Estate Trends, Trends, Uncategorized

It’s Not What You Think It Is

27 October 2009 by John Tuccillo 221 views One Comment

Question:  Was the jump in existing home sales in September encouraging, misleading, or ho-hum?

The answer is yes. It is ho-hum because the pending sales index predicted the jump. So there is nothing new happening in the housing market. It was encouraging because it was more good news about a housing market that is in real recovery. The coming months will display a consistent positive movement in real estate. It was misleading because the additional sales were “borrowed” from 2010 because of the expiration deadline of the first time buyer tax credit. We will see sales drop as soon as the credit disappears. The state of the market is such now that even an extraordinary piece of data like a sharp monthly rise in sales can support any argument about the future of the market.

Where is the truth?

My intelligence from around the country tells me that we are somewhere between the last two explanations. Where there are jobs, supressed demand is emerging and sales–unaided by extraordinary government subsidy–are happening.

Yet, where there are no new jobs, the market is almost fully reliant on the tax credit. It strikes me that the best policy for real estate is to encourage in all possible ways the job creation that will guarantee a strong housing market and avoid getting addicted to a government handout that introduces yet another artificial element into the market.

Print This Post Print This Post
1 Star2 Stars3 Stars4 Stars5 Stars (No Ratings Yet)
Loading ... Loading ...

One Comment »

  • Betty Plashal said:

    John,

    What do you think about the very low inventory of homes for sale in Loudoun and parts of Fairfax. If you remove short sales that have a low percentage of actually closing, senior citizen active community for 55+ and new homes, our inventory under $500,000 is all but non-existing. Real Estate agents do not have a good selection of homes to show perspective buyers.

    Betty Plashal
    Member of Your Leadership Group
    Selling homes for 37 years with Long and Foster

Leave your response!

Add your comment below, or trackback from your own site. You can also subscribe to these comments via RSS.

Be nice. Keep it clean. Stay on topic. No spam.

You can use these tags:
<a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>

This is a Gravatar-enabled weblog. To get your own globally-recognized-avatar, please register at Gravatar.