Fannie Mae's Chief Economist noted the tax cred shifted demand forward but did nothing to change the market, even while creating momentary, unsustainable price appreciation.
Experts say up to 20% of pending contracts nationwide will not close.
Chart shows a -55% decrease from May 2004 to May 2010. (Click for larger image in new window. Chart via RealCentralVA.com)
CHARLOTTESVILLE ALBEMARLE DEMAND RISES: April 2010 single family home pending contracts rose +/- 36% (reading April 2009 as 110 and April 2010 as 165). (Click for larger image in new window. Chart via RealCentralVA.com)
May 2010 fall about -30% from May 2009, even though last year was the middle of the "Great Recession" (reading the chart as 120 in 2009 and 85 in 2010). (Cick for larger image in new window. Chart via RealCentralVA)
BELOW: When April and May are combined, a slightly higher tax-credit bump-up emerges: about 25 more contracts in 2010 than Recession 2009. And both years are still less than every year going back to 1999. Not really sure what the focus of this chart is from RealCentralVA, btw. Is it supposed to suggest that, going forward through June and July, contracts will rise? The previous two charts showed the rise to be correlated with Federal Government Subsidies. Still, June typically has more sales than April, as this area is more tied to school year than many. (Click for larger image in new window. Chart via RealCentralVA.com)
As noted in May, the Homebuyer Tax Credit did nothing to increase Q1 closed sales of single family homes in the City of Charlottesville, which were the same as 2009 and 43% lower than 2008. It did, however, have an impact on Albemarle County single family home sales, which rose.
Inventory will continue rising, and since there are so few buyers, short sales and foreclosures will rise, too. Read a full area forecast here. (Declines are inevitable unless, of course, cash starts raining from the clouds; anything's possible, it's just not probable).
Charts are via/copyright RealCentralVA.com.
See also: June 2010 Inventory and C'ville Asking v. Selling Prices.
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