Wednesday, August 25, 2010

Housing Sales - Problems All Around

So did the wonderful tax credits get more people to buy a house or just change the date of the purchase?New home sales hit lowest level (Beware the scare tactics of the headline. July new home sales look pretty close to May, if lower than June.)
Housing experts attribute the weak results to the expiration of a federal tax credit April 30. They said the program probably lured people into buying homes earlier than they had planned, thereby eating into future sales.
So government can't actually create demand? It can only play around the margins with its tax incentives?

And why should I be paying for incentives for other people to buy homes? If they need an extra 4000 bucks, then they should just buy a smaller house.

Existing home sales - also subject to the same time-shifting buying habits - are also not doing too well. NAR July Existing Homes Sales Fall 27.2% to 3.83m The lowest level since 1985. Which even for a doom & gloom person like me is a bit scary.

Of course now that people no long believe real estate is "sure thing" investment, maybe people are re-evaluating the whole idea of renting from the bank. (Minus the protections you get if you are really a renter that is.
Single-family home sales, which account for the majority of sales, fell 27.1% to 3.37m — the lowest rate since 1985.

July sales fell 25.5% from 5.14m units a year earlier. The NAR said the revised June sales rate of 5.26m was down from a previous figure of 5.37m.
The realtors are sure everything will be better by the fall, but will that turn out to be the case?

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