Well, bye bye tax credit! That's right, if you're waking up without a ratified contract for your new home this morning, you've missed the opportunity to take advantage of the federal home buyer tax credit. As it turns out, it seems that buyers in the (local) market have been less focused on this than I'd have expected. So, if you're a buyer in the market place, perhaps hoping to find less bidding wars in the market place now that it's May, you could be disappointed. The buyers I have been working with have thought that the tax credit would be "nice" but it was not the underlying reason for their purchase decision. I've not talked to a single buyer who would choose a home they didn't like or overpay for a home just to ensure that tax credit. So, how will the market do in May? Time will tell, but all signs point to a strengthening economy, local job growth, and an improving housing market....in other words, the bidding wars will continue.
Yes, I said improving housing market. You read that right. The more reports we see, the better the numbers look:
But, better than reading someone else's opinion of the market reports, check them out for yourself. Aprils reports begin to come out in 1-2 weeks (usually around the 10th of the month) after all the data has been compiled. You can view the reports at: http://www.mris.com/reports/stats/index.cfm where you can run statistical reports for your zip code and for your county, commentaries begin to be published shortly thereafter.
My Two Cents: As my business has steadily been picking up since the snows melted, I feel certain that the compiled data will show that my business is not an anomoly and that activity overall is high.
While foreclosures and short sales continue to dominate some submarkets, I am seeing a dramatically notable return to "traditional" sales due to relocation and personal changes, and more new home sales. I attribute this to homeowners finally getting "real" about their pricing; and buyers getting sick of the distress home sale market place.
The exception: The high end market. It continues to be very slow. We've not seen as many distress sales in this market segment because these homeowners typically have more financial cushion and can withstand financial losses for longer. However, that won't continue forever, they are not immune. The industry expects to soon see more distress sales in the high end market place, and with that, price corrections to rebalance activity levels.
My recommendations for the high end market:
For sellers: For sellers with a home in that "high end" market, the issue is price. Some homes in that segment are selling and if you want yours to be one of them, take a fresh look at your pricing strategy. Buyers are price, and more importantly value, sensitive. They want to make sure they are buying at a level where they will not lose more value in the next year. Be the first to correct your price~your comps aren't doing it yet, and so there is less competition and it is easier to look like the best value in the market place. Don't wait, you'll end up leaving even more money on the table, especially once you'll be forced to compete with distress sales... and trust me, those banks WILL sell the homes; they are not emotionally tied to the price or the house. When the home next to yours is a trashed foreclosure, and is the only thing that has sold in your neighborhood in a year, it does not bode well for your home's value... and that is coming.
For buyers: Look, look, and look again... and maybe even wait to buy. As those sellers move from "wanting" to sell to "needing" to sell, their prices will come down. Better values are on the horizon in the high end market place.
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Vicky Chrisner
703-669-3142
