This month’s numbers reveal a market in transition—the question is, where is it going?
The good news! Historically low inventory of homes for sale, a 39% increase in the number of pending home purchases and a whopping 59% increase in the number of homes sold. Wow! And much of this actrivity is being fueled by the first time home buyers taking advantage of historically low interest rates and the $8500 federal tax credit. The State is introducing a $10,000 tax credit for homebuyers.
The bad news! The $8500 tax credit expires the end of April. This month we saw interest rates creep up over 5%. There is a lot of international pressure on the Fed to bring rates up to stem inflation.
The ugly news! The number of homes going into pre-foreclosure continues to grow, up 150%. If these homes where to enter the market they would put tremendous downward pressure on home prices.
Is this the right time to sell? Yes! How much longer we will have to wait for home prices to stabilize? I’m thinking 2015 minimum! How much further will home prices drop? My 8-ball isn’t giving me an answer, thanks Kaci.
Dean