Springfield Real Estate News

 


 

Waiting for spring to sell? You may be too late.

By Jim Stewart, VP& Marketing Director, Assist 2 Sell, Springfield

Conventional wisdom says that spring is when the traditional home selling season starts. This is usually, at least partly, correct but it may not be true  2010.  If you wait until April or later to list your home your chances of selling in 2010 will probably be significantly reduced.  Why, you ask?  Two words: “Tax Credits”.  

 

Home sales in October and November 2009 were up as much as 40% largely because of a $8000 first-time home buyer tax credit.  The credit was supposed to expire on November 30th but President Obama extended it through April 30th, 2010.  The credit was also expanded to include a $6,500 credit for some non-first-time home buyers.  The problem is that Congress and the President have made it clear that this is the last extension of the credit.  After April 30th, there will be no further stimulus of the housing market. Additionally, the Federal Reserve will be ending a program on March 30, 2010 which by some estimates has artificially held down mortgage rates by a full percentage point.  What this means is that if you don’t sell your home in the first four months of the year your task may become significantly more difficult. 

 The consensus in the real estate industry is that without the first-time home buyer tax credit, sales of homes in 2009 would have been far fewer than they ended up being.  Consider auto sales as a predictor of home sales.  The car industry needed the “cash for clunkers” program to stimulate demand for autos as sales before the program were abysmal.  Unfortunately, when the “clunkers” program ended sales of autos fell off a cliff, yet again.  The same thing  is likely to happen in the real estate market after April 30th.  The spring selling season typically starts in April and peaks in earnest in May, June and July.  However, because of the pending tax credit expiration, sales will probably start to rise in February and peak in April or May.  Therefore, if you wait to list your home until April or May you may have missed your best chance to sell in 2010.  There is a general industry wide consensus that sales of homes in the second half of 2010 will be worse than the first half.  In fact, some industry analysts are expecting 2010 to be the low point for the sale of homes in America. 

 Don’t get me wrong, life for home sellers doesn’t end on May 1st, 2010.  Homes will continue to sell after April 30th; it’s just that fewer will sell.  But, the extension and expansion of the tax credit gives sellers who didn’t sell in the last few months, or who want to sell this spring a better chance than they would have had if the original November 30th, 2009 expiration would have been allowed to take place.  As you’ve heard on TV many times, this is a limited time offer only while supplies last.  In this case “supplies” will only last until April 30th, 2010.  After that, we’re on our own.

 

 

 


 
 

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