December Drop in Home Sales

Crying Wolf About April 30?

Sales of existing homes in December fell 16.7 percent from November to a seasonally adjusted annual rate of 5.45 million units, the National Association of Realtors said Monday.

--"Existing Home Sales Drop More Than Forecast"; The New York Times (1/25/2010)

My take is that a big chunk of the drop is explained by the (then) Nov. 30 deadline for qualifying for the first-time home buyer tax credit.

As you may recall, at the 11th hour, Congress extended and expanded the credit.

The new expiration date is April 30 (deals actually have another 60 days to close).

And no, I don't expect a flurry of transactions ahead of the new deadline -- at least not more than would normally occur in what is otherwise a seasonally very busy time for the housing market (at least in Minnesota).

Tax Credit Extension/Expansion

(Almost) Done Deal!

The Senate passed the bill 98-0 yesterday; the House followed suit today.

President to sign tonight/tomorrow.

Highlights per Steve Mohabir, City Lakes' in-house loan officer:

One provision will continue for five months a popular $8,000 credit for many first-time home buyers, which was to expire Nov. 30, and create a $6,500 credit for some homeowners who want to buy a new residence.

The move-up provision looks like if you have owned and lived in a residence 5 of the last 8 years and buy a new place, it looks like the $6,500 would apply. Other than that same as before with higher income limits for the 1st time home buyer.

Bottom line: this will be a big booster shot for the 2010 housing market, especially move-up Buyers.