With record sales in April, it is apparent that the tax credit was successful in stimulating home sales this year. “April was such a frenzy; the numbers were inflated by the tax credits,” said independent broker Gary Bauer. “Realtors were working up to midnight on April 30 to get homes placed under contract. Buyers were making multiple offers on homes and sellers were dealing with multiple offers,”
Consumers jumped at the chance to take advantage of the federal home buying tax credits. In April, a whopping 178 homes were placed under contract in Parker Colorado, based on Metrolist data. That was an increase of 39% from April 2009
After the tax credit expired in May, buyers wrote contracts on only 102 homes in the Parker area; a 43 percent drop from April. Homes under contact were also down 26 percent from May 2009, (when 137 homes were placed under contract) and down 32 percent from May 2008 (when under contract homes numbered 150).
In April, 2010 median price for Parker homes fell slightly from 2009 median price (0.5%) but increased by 3.2% from April 2008. The May Median price did fall 2.3% from the April’s median price; however the median price in May of 2010 was 3% higher than May of 2010.
It makes sense that both the number of contracts and median price went down in May for the following reasons: Many people who were thinking of buying a home in April through June moved up the date to take advantage of the tax credit. As a result of the increase in competition, many homes were getting multiple offers which inflated prices. I had a buyer who put off looking at houses in April because multiple offers were pushing up prices even over the $8000 benefit buyers would reap. She kept losing to people desperate to cash in on the tax credit. Since she waited, she ended up getting a great deal in May, which may have saved her over $12,000.
As of this writing, June appears to be doing about the same as May. The good news for buyers is that it is still a great time to buy a home because interest rates for 30 year fixed are at an all time low. Even though you missed the $8000; a few months down the road you can still come out ahead because of lower prices and greater number of homes on the market. If you act now, you may be able to save far more than $8000 over the period of the loan.