My New Blog

Many people think that when the tax credit stimulus expires the housing market will again collapse.  Don't panic, that is over reacting.  Don't buy into the "Double Dip" talk in the housing market just because sales of new construction and existing homes decreased by 2.2% from April to May.  That is only 125,000 fewer homes -Big Deal! 

5.66 million homes were sold in May which is up 19.2% from a year ago.  Nearly a million more homes sold this May over last May.  That is the BIG DEAL. 

The tax stimulus credit required that home buyers be contracted to buy a home not later than April 30th and close by June 30.  Since sales are only counted at closing it was expected by economists and Realtors alike that the sales numbers would remain strong through June.  If you assume it takes 30 to 45 days to close, sales in April should have shown up in May through June.  With May's numbers dropping some are panicing about a larger drop when the stimulus is over at the end of June. 

I don't know about you, but I think that if you hadn't decided by the beginning of the year or late last year to buy a home then you probably didn't wake up in March and say "I should buy a home this month".  What I mean is that the "stimulus bump" is probably not as big as anticipated therefore the drop off will not be as large as people expect.  The result - I don't expect a double dip when sales "normalize" after the stimulus expires.