It happened over the weekend without much fanfare or comment. The $8,000 homebuyer tax credit expired. For some, it helped them make the move to homeownership. For others, it was a much needed shot in the arm that boosted business and made
everything feel like 2004-2005, again. Many real estate agents, mortgage brokers and appraisers found themselves busy, some were even overwhelmed by the surge of business. It felt so good that many pundits were touting the end of the housing crisis, claiming
that the economic recovery is underway...look out, good times ahead!
While the economic recovery may be underway, it was not the tax credit that spurred it along. The tax credit may prove in the weeks and months to come to have been a crutch upon which the housing market was propped.
It will be interesting to see if the recovery has any legs now that the crutch has been removed.
Based on what we've noticed in the Philadelphia markets, I think that we may see a dip in home prices in the near future. The expiration of the tax credit may keep some first time buyers from entering the market. This, along with new listings
being added, will force pricing pressures downward as more listings chase fewer buyers. It will be more important than ever for Philadelphia area Agents and Sellers to price their properites correctly and competitively.
The hand-out is over, interest rates are still artificially low and the tsunami of foreclosures is still on the horizon...it will be an interesting next few months.