Here we are 2 month past the end of the first time home buyer tax credit. What effect did it have on home sales? What is happening in the real estate market? Where are interest Rates?
We did get an extension from congress on the first time home buyer tax credit, but only for the time to close escrow. Instead of expiring on June 30th, buyers now have until September to close escrow. The trick is they must have been under contract prior to April 30th. What effect does this have on the market? It really helps new home buyers and short sale buyers. It doesn’t add any new buyers to the pool, but it gives those under contract incentive to close escrow. It will have a small effect on the market.
What is happening in the Metro Phoenix & Scottsdale Real Estate Market?
Inventory of single family homes available for sale rose in June by 3.3% over May to 27,034. Homes under contract or the Pending homes dropped 13% to 15,238. Closings for single family homes in the Meto Phoenix area dropped 16.4% to 5,766. And most disappointing is that New Sales for the month dropped 7.7% to 5,313.
So what did we expect? The first time home buyer tax credit expired. It was a great deal for buyers and motivating them into the market. Also, the immigration bill has caused another exodus of residents from the state.
I will be real interested to see how the sales fare for the rest of the year. Home sales in the metro area are very seasonal with the peak months from March through July. Therefore we are in our peak season of selling in June. Yet June experienced the least amount of homes sold (new sales for the month not closings) since January 2009! Now Supply vs. Demand is a little further out of balance. Remember to help a market you either decrease supply or increase demand. Just the opposite happened over the past 2 months. In April, with demand of 9,292 sales for the month and supply of 25,600 there was a 2.8 month supply of homes. Looking at June’s numbers, there were 5,313 homes sold, demand, and 27,034 homes available for sale, supply. Thus there is a 5.1 month supply of homes on the market. That is a HUGE change going from 2.8 to 5.1 during prime season!
What does this mean? I don’t know for sure. It means we want to continue watching the market and look for signs. What is does mean is weakness, meaning prices should come down further. But we need to see what happens this month and the coming month. The market is like a oil tanker it takes quite a bit to of time to turn.
I hope you found this helpful. Please call me if you have any questions, concerns or need my help in real estate. 480-502-7699
Just My Opinion…
Jeff Cameron
Keller Williams Integrity First
480-652-2004