Today’s Talking Point 11/11/09
Supply and Demand
What will happen in the real estate market over the next six months? I believe the quote below does a great job of explaining it.
From the Zillow News Release Issued: November 9, 2009:
“The next several months will be critical to the housing market. Previously, we’d been expecting to see increasing foreclosure rates during the real estate market’s slow winter season, a confluence of events that would likely drive inventory up and prices down. But now, with the extension of the $8,000 first-time homebuyer tax credit and a new $6,500 credit for some repeat homebuyers, we could see a bump in demand that could partially offset the increased supply of foreclosed homes on the market. The credits are likely to bring continued stabilization in prices over this period, versus the price declines that we almost certainly would see otherwise. Whether this stabilization will be sustainable after the tax credits expire, however, is yet to be seen. Some of the demand that we are buying with tax credits we are also borrowing from the future, and will likely have to pay for later in the form of weaker-than-normal demand.”
However, I don’t think the tax credit extension/expansion will have much affect on the upper tier homes in any market. We must be strong with our advice with these sellers when discussing price.