Nationwide in December, existing home sales posted the largest monthly drop in more than 40 years. The decline came after the $8,000 first-time buyer credit was extended, signaling that buyers stopped scrambling to meet the November deadline. Now, many economists are wondering what will happen to the market, once the government starts to pull back its support in the spring.
Kathy Krebs and her husband took a financial hit on their house in California and moved to the Austin area for work. They have waited since they got to the area in May to start shopping for another home. "We're taking our time, like I said, we moved here in May and we don't want to make a mistake, you know, we've been through that in California. So, we had heard that the market was still going down, so we've just been very cautious. And things are starting to stabilize now, but the inventory when we first moved here was still just so big and the inventory is going down now," Krebs said.
Kathy is not the only one uncertain about the real estate market. In the spring, the government's existing tax credits for home sales are expected to expire, and it will face increasing economic pressure to raise interest rates. Now national analysts are wondering if the relative stability in the housing market can sustain itself.
In Central Texas, realtors are saying it can. Christy Gessler is a realtor in Williamson County, and has watched the market there remain stable compared to the rest of the country.
"From December of '08 to December of '09, we actually saw home prices trend up a little bit here, even though numbers of homes did decrease a little bit in sales. So really our numbers, right here, statistically that we're showing here in Williamson County, we are basically on par with our numbers from 2007," Gessler said.
The Austin Board of Realtors agrees. Chairman John Horton said an end to government incentives for buyers shouldn't change the theme of relative stability for Central Texas. Most are looking to an end in job losses to signal real stability. Additionally a bottoming out of the new home market has been regarded as an indicator of recovery.
"I'm not too worried about the timing of it I still believe that people understand that owning a home is the American dream, it's good for building long term wealth, and I think that even though this has probably incentivized people to work a little harder to get this done now, I still think they will understand the benefits in the future," Gessler said. "I don't think there will be a fall back after that. But I think it has been definitely instrumental in starting the market and continuing to move it up," said Horton.
The extended home buyer tax credit is set to expire April 30. To qualify applicants must have a binding contract before that date and close on a home by July 1.
Schmidt, Harlan. (2010, January 25). National home sales down, Austin area remains optimistic. Retrieved February 1, 2010 from News 8 Austin website: http://news8austin.com/content/top_stories/default.asp?ArID=264905
Kathy Krebs and her husband took a financial hit on their house in California and moved to the Austin area for work. They have waited since they got to the area in May to start shopping for another home. "We're taking our time, like I said, we moved here in May and we don't want to make a mistake, you know, we've been through that in California. So, we had heard that the market was still going down, so we've just been very cautious. And things are starting to stabilize now, but the inventory when we first moved here was still just so big and the inventory is going down now," Krebs said.
Kathy is not the only one uncertain about the real estate market. In the spring, the government's existing tax credits for home sales are expected to expire, and it will face increasing economic pressure to raise interest rates. Now national analysts are wondering if the relative stability in the housing market can sustain itself.
In Central Texas, realtors are saying it can. Christy Gessler is a realtor in Williamson County, and has watched the market there remain stable compared to the rest of the country.
"From December of '08 to December of '09, we actually saw home prices trend up a little bit here, even though numbers of homes did decrease a little bit in sales. So really our numbers, right here, statistically that we're showing here in Williamson County, we are basically on par with our numbers from 2007," Gessler said.
The Austin Board of Realtors agrees. Chairman John Horton said an end to government incentives for buyers shouldn't change the theme of relative stability for Central Texas. Most are looking to an end in job losses to signal real stability. Additionally a bottoming out of the new home market has been regarded as an indicator of recovery.
"I'm not too worried about the timing of it I still believe that people understand that owning a home is the American dream, it's good for building long term wealth, and I think that even though this has probably incentivized people to work a little harder to get this done now, I still think they will understand the benefits in the future," Gessler said. "I don't think there will be a fall back after that. But I think it has been definitely instrumental in starting the market and continuing to move it up," said Horton.
The extended home buyer tax credit is set to expire April 30. To qualify applicants must have a binding contract before that date and close on a home by July 1.
Schmidt, Harlan. (2010, January 25). National home sales down, Austin area remains optimistic. Retrieved February 1, 2010 from News 8 Austin website: http://news8austin.com/content/top_stories/default.asp?ArID=264905
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