Here’s a larger set of weekly pendings, hoping to quantify the impact of the state housing tax credit on detached sales in San Diego County.
Number of New Detached Pendings
| April | SD Co. ’09/’10 | NSDCC ’09/’10 |
| 3-9 | ||
| 10-16 | ||
| 17-23 | ||
| 24-30 |
After enjoying a 39% increase in sales, year-to-date (wasn’t it 44% the other day?) the North SD County Coastal pendings actually tapered off the last couple of weeks, once you subtract for expected fall-outs.
The late push during the last two weeks to secure a binding contract before the finish of the federal tax credit might result in an extra 100-150 sales county-wide, at best. It could end up being much less.
The overall impact on county sales from the tax credit? Let’s compare year-over-year the pendings between Jan 1st and April 30th.
2009 = 7,827 all closed
2010 = 8,009 (4,472 closed, 3,537 pendings)
There were 1,415 of the 3,537 marked pending since April 15th, and still in their 17-day contingency period. If a third of those fall out of escrow (467), we’d be behind last year’s total sales. If we see half of the 2,536 contingent listings close, it would get us up to 8,810 closings, a mere 13% improvment in sales from 2009. You could say the tax credit didn’t help much.
It may not have “helped” much, but it definitely created a lot of froth.
Unfortunately, at the rate we’re going with adding new inventory (at least in LA and OC), we’ll undo everything the tax credit did within 2 weeks.
In the end, many people passed over short sales simply because they’ll close very very late, if at all. And that’s still 50+% of the for sale market.
Chuck
Given that for the tax incentive it’s this house or no house, do you think more deals might close with the buyers having a greater incentive? Or will seller’s thinking they have the upper hand, be such jerks that the deals fall apart at a typical rate?
considering that real estate pricing happens ‘at the margin’ I would say that 13% more closings attributed to a specific program is pretty dramatic. Remember that 1 person overpays, then everyone else thinks that is the new market pricing for ALL homes.
Adios incentives…
“If we see half of the 2,536 contingent listings close, it would get us up to 8,810 closings, a mere 13% improvment in sales from 2009. You could say the tax credit didn’t help much.”
IMHO they weren’t going for volume but price support and clearing the backlog while keeping inventory off the market. The RE industry cares about volume, the government doesn’t.
It appears that the pent up demand for the current inventory of homes at today’s prices has been exhausted.
However this implies that lower prices, should they occur, would spark some incremental demand.
With the tax credits, the government is probably pushing on a string at this point.
Good post (#3), clearfund.
Well, I still have not received my tax refund despite filing my taxes in March and being told by the IRS I’d get them last week. I bought my house last year.
If you qualify, you pretty much have to just wait and wait it seems.