Home Buying in 46394>Question Details

John, Real Estate Pro in 60612

How much of a drop in sales where there be in the market after the tax credit expires?

Asked by John, 60612 Sun Apr 18, 2010

Since the tax credit expires the 30th of April..where there be a drastic decrease in sales for the rest of the season?

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John- When the government bows out, Motivated Sellers will have to step up to the plate and offer incentives...aggressive pricing + financial incentives to lure the fence sitters to come back out and look.

What happened to car sales after "cash for clunkers" went away?
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1 vote Thank Flag Link Mon Apr 19, 2010
I think an educated buyer will realize that home prices and interest rates are still low and realize it is a good time to buy with or without the credit. I'm more worried about the job market/unemployment rate.
1 vote Thank Flag Link Mon Apr 19, 2010
The tax credit really affected a small portion of the market: mostly first time homebuyers who might not have felt they could enter the market without the $8000 help.
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.
1 vote Thank Flag Link Mon Apr 19, 2010
Let's revisit this question in a few months, and we'll all be experts, and know the answer!!

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 !
1 vote Thank Flag Link Mon Apr 19, 2010
Last time the credit ended sales fell off a cliff. Why do you think they went in a mad dash to extend it? No one would buy with it gone. I see no reason to think this time will be different. Future buyers have been brought forward into present and (now) past transaction to buy a house and get free money. With that incentive in places there have still been very few buyers. Expect a major drop in activity once the free money goes away.

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.
1 vote Thank Flag Link Sun Apr 18, 2010
John
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...
Best regards
1 vote Thank Flag Link Sun Apr 18, 2010
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