They show that the Federal Reserve's San Francisco regional summary on regional economic conditions that's done 8 times a year say that the West Coast housing market "weakened somewhat" over the summer. They went on to say in the Fed U.S. 12th District for their July report demand for housing "appeared to deteriorate somewhat".
Steve Thomas was quoted as saying, "The latest tax credit may have done more damage than good... The pumped-up pending sales figures ultimately led to pumped up closed sales figures. Reports of a year-over-year rise in demand, sales and the median sales price enticed many sidelined homeowners to place their homes on the market at unrealistic prices. They mistakenly thought that the market was turning along with home appreciation. With the end of the tax credit, demand, the number of new pending deals over the prior month, dropped significantly from its end of April peak of 3979 pending sales. Demand now totals 2893 pending sales, a 27 percent drop for its height."
All of this is true. However, when you give an incentive to purchase a product, in this case a home. Those who would be purchasing a home move their purchase up in time. That will cause a drop after the incentive. We just took those who were going to be in the market to get in sooner. It great affect but it did not stimulate for the long run only the short run. We should get back to a sluggish market that we would have had if nothing was done.
The market cannot run faster unless consumer confidence is back and people do not have a fear of the market. Was the tax credit a help? It helped those who sold during the tax credit. Or did it harm us? It may have harmed those who thousht the market was increasing in value.
Tim Lorenz
Instant MLS Listings & Free Market Analysis
"We have actually closed many short sales!"
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Tim Lorenz . Over 40 Years Experience Representing South Orange County Home Buyers, Sellers, Investors and Relocations!
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