What happened to car sales after "cash for clunkers" went away?
When you are talking an investment of hundreds of thousands of dollars, $8000 is nice, but shouldn't be necessary.
Will there be a drastic decrease? Of course nobody knows but I think the market will be affected much more by things such as unemployment rates and interest rates than a one-time $8000 "gift" from the government.
First time buyers will still be out there, but, imo. not with as much of a sense of urgency as many seem to have now.
It may not be a bad thing, though, as there is a lot of pressure and stress on those buyers now (in my area) resulting in multiple offers. Mulriple offers are very stress-producing. I'll be happy to see them go !
To make it worse, interest rates will rise even more. That takes away buying power. Added together expect a lot of lower prices and fewer buyers.
I just consulted my crystal ball and it showed me a giant question mark. Noone knows! Noone can predict! All we can do is speculate and that is still driving many markets in the US speculation that values will rise again. Investors are snatching up homes at the lowered values because they can get a good return on thier investment generally anywhere from 8-20 percent if they buy, rent and hold. So as a property manager have you seen more clients calling you saying hey I just bought 3 houses I paid cash for and I want to rent them out? The tax credit while it did help by bringing in buyers that would most likely have bought anyway, by giving them an incentive to do so sooner only make up a portion of the markets. Investors make up another portion of the market what those numbers/percentages are I don't know off the top of my head but I could get them for Phoenix anyway. A local area Realtor may be your best source of information on something like this. Look at the trending and statistics in your market and see what percentage of people bought for the tax credit and what percentage didn't. Again it helped but who knows what is going to happen when it is gone...