Surfer Steve wondered what we can expect in the post-housing-tax-credit environment. To qualify for the federal tax credit, transactions have to be secured by Friday, and to get the state cheese, buyers need to close their sale and apply before the money is gone – and that’s predicted to happen before the end of May.
In other words, the tax-credit era is almost over, at least for now.
The winding down of the tax credits has diverted some attention away from the fact that mortgage rates haven’t gone up much since the Fed quit buying MBS at the end of March.
Between the two, the only pressure on buyers is to purchase a home before their lease runs out.
There is a resounding theme among buyers: They’ve waited this long, they aren’t going to compromise now – even if it means having to sign another lease.
If they do buy, it’ll be because the house suits the majority of their needs, and can be bought for an attractive price. But I think we’re in for good news the rest of the year.
Doesn’t there have to be more sellers who NEED to sell, and will be forced to get real about their price? I think so, and while they might be basking in what they think is the prime selling season right now, within the next 30-60 days it will be become more obvious to them what we already know – they are an over-priced turkey.
Look for more sellers to be inching their way towards the exits, and if the banks start unloading, it could get hysterical. Market conditions are pretty good right now – if there were more quality homes for sale at price points around today’s comps, they’d be selling.
If there was a surge of listings priced 5% under comps (bank-owned or otherwise), they’d be gobbled up in a hurry. But that’s about 10% to 20% below where most sellers are listed now – we’ll see if they can handle the truth.