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Did the tax credit stabilize home prices?


               
2010 Jul 5, 1:21pm   4,631 views  21 comments

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Following a surge driven by the home buyer tax credit, pending home sales fell with the expiration of the deadline for qualified buyers to sign a purchase contract, according to the National Association of Realtors.

NAR chief economist Lawrence Yun said, “Consumers are rational and they rushed to meet the tax credit eligibility deadline in April. The sharp decline in contract signings in May is a natural result with similar low levels of sales activity anticipated in June,” he said.

Yun noted the tax credit has broadly stabilized home prices. “Without the tax credit, there will be more aggressive price negotiations between buyers and sellers. The key test on whether the housing market can stand on its own without stimulus medicine will depend critically on private sector job creation in the second half of the year.

“In most areas of the country, there will be no sharp snap back in home prices in the upcoming years, although some local markets have experienced double-digit gains this year,” Yun said. NAR forecasts the national median home price to rise only 4% cumulatively over the next two years.

Did the first time home buyer tax credit stabilize or increase home prices?

#housing

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20   Done!   @   2010 Jul 8, 7:34am  

gameisrigged
Don't forget there's only Two parties in this Country and the last two elections I was told that if I didn't chose sides then my Vote either didn't count, or was robbing Senator Kerry of his chance to suck worse than Obama.

My rant is how I see it and what I would like to happen, the closing statement, is a more likely scenario of what we'll get at best. More political two party glad handing and political Gladiator fodder.

I doubt the Democrats or the Republicans are going to do Diddly squat about the theft that has taken place over the last Decade. We pinned the tail on Bernie Madoff, and he will be double ought's Villain after all of this.

Hank Paulson and Ben Bernake could write a tell all book in five years from now, stating an elaborate scheme where they begged for Tax bailouts, and the beneficiaries would cut them a check the next morning. It would make the Opera Book club, more than it would create a rabble.
And Frank Dodd could go on to take Carl Molden's place as the American Express spokes person.

21   toothfairy   @   2010 Jul 8, 11:52am  

thomas.wong1986 says

toothfairy says

I dont think the surge was purely from the tax credit. There was a lot of pent up demand everybody decided at the same time that it’s safe to buy.

so the bounce stronger than usual this spring.

If anything, it pulled demand forward leaving fewer buyers in the future, which will push prices lower.

it pulled demand forward but also cleared out supply so it's mostly a wash.

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