As we wind up 2009, here are more sales statistics. You don’t see much extra benefit from the tax credit in the November closings – there was only 10% increase in SFR sales, Y-O-Y, and 29% increase in condo sales. Did more pending sales get pushed into December or beyond?
Or without the tax credit, would sales have declined Y-O-Y?
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The transactions were very different, each with its own unique situation, opportunities and challenges. From start to finish, Donna and Jim helped navigate the pre-sale preparation, the listing, showing of the house, buyer negotiations, the final close and all of the paperwork and decisions in between. What stands out with both transactions is the professionalism of Jim and Donna (and their team), wonderful communication (timely, relevant, concise), their deep understanding of market dynamics (setting realistic expectations), their access to top-notch contractors, and last, their ability to guide us across the finish line successfully. We wouldn't hesitate to use Jim and Donna in the future and highly recommend them for anyone looking to buy or sell a property in North San Diego County.Trustindex verifies that the original source of the review is Google. We sold a home with Jim and Donna and from beginning to end they were consummate professionals. 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The tax credit is not nearly as significant as Fed-subsidized mortgage rates.
Let’s see what happens when the Fed stops printing money out of thin air to buy mortgages. They claim they’re going to stop in March. If they’re lying, China ain’t gonna like it and could stop buying Treasuries, driving rates way higher.
WC…
http://www.businessinsider.com/china-is-unloading-us-dollars-rapidly-2009-12
Agree with both of your points.
One possibility, **if one is prone to conspiracy theories,** is that the Chinese might already be unloading US Treasuries in exchange for real estate. Perhaps they are buying up some of the inventory that we expect to see as part of the “foreclosure tsunami.” Maybe they intend to put it back on the market at some point, or maybe they will move vast swaths of Chinese families into their new homes in the U.S. as part of their “globalization” plan. 😉
The Chinese character/name for the United States essentially means “beautiful country.” I bet they’d rather hold a claim against some of our land instead of holding “worthless” treasuries or dollar bills. Likewise, I bet the U.S. would like to eliminate some of its debt and get rid of the “real estate overhang” at the same time, too!
8.) Mei – beautiful, pretty
The United States of American is called Mei Guo in the short form. Guo means country so Meiguo is a good name.
http://chineseculture.about.com/library/picks/aatp_luckysymbols.htm
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Okay, that’s just a conspiracy theory and is not based on any facts or even hearsay. Just trying to think from the perspective of the Chinese and also from the perspective of our over-indebted government.
For clarification…
I do believe there is a lot of Chinese money coming into the U.S. real estate market, and have reason to believe this part. The “conspiracy” part is that it’s a calculated decision between the Chinese and U.S. authorities, using Treasury debt as payment for the properties.
Well if it is Chinese money all I can say is they seem to have better timing than the Japanese money!
Unfortunately there is no way to measure the actual effect of the tax credit on sales without an alternate dimension to compare against. If this alternate dimension had a -10% drop in sales, the effect is 20%. If this alternate dimension had a 8% increase in sales, the effect is a relatively small 2%. Without this alternate dimension, we can only wildly speculate.
Since that’s fun, I’ll give wild speculation a try: it had a smaller effect than a lot of people claim and a bigger effect than a lot of people claim, because a lot of people think black and white on the issue when he truth is probably somewhere inbetween. They project their own beliefs onto the population when in reality the population contains plenty of people who will pull the trigger for a tax credit and plenty of people determined to be in 09 regardless of a credit (for example everyone who didn’t even qualify but bought anyways). And I can speak for myself that although I qualified for the credit, it was not a reason for me buying.
I can remember back – was it the 70s? – when everyone was worried because the British seemed to be buying up everything American. Then it was the Japanese. Now perhaps it is China’s turn.
The sun will come up tomorrow.
I think it had somewhat of an effect on the market. The percentage of first time buyers and FHA buyers went up in 2009 versus 2008. I’ve seen numbers ranging anywhere from 30-40% of homes sold this year were to first time buyers and/or FHA buyers (Not sure what percentage applies to San Diego, I’d assume it’s close). There’s got to at least be some percentage of these buyers that were encouraged to go out and buy a home because of the credit coupled with FHA financing and low interest rates. Effectively there’s new “zero down” buyers that wouldn’t have bought a home otherwise.
If 25% of the 40% bought because of the tax credit you can fully explain the 10% increase in sales.
I do see signs the mix is shifting though, so North County Coastal seems to be heating up but that’s not really First Time Buyer land. When I take a quick look at Vista, Escondido, Mira Mesa, etc, I’m seeing inventory trending up recently.
I would argue that tax credit did very little to directly help North County Coastal housing, but the activity that it generated in the lower end areas might have given potential North County Coastal buyers enough confidence to get off the fence. That coupled low priced bank owned homes hitting the north county coastal market more heavily.
As Jim says, nothing price can’t fix, so failing prices in the higher end has a lot more to do with it than any tax credit.
Those first timers getting in on the low end w/ tax breaks are the future move up buyers.