Just out today – Pending Home Sales — a forward-looking indicator based on contracts signed in December — increased 1.0 percent from November, and remains 10.9 percent above December 2008.
Lawrence Yun, National Association of Realtors chief economist, said “There are easily understood swings in contract activity from earlier as buyers respond to a tax credit that was expiring and was then extended and expanded,” he said. “These swings are masking the underlying trend, which is a broad improvement over year-ago levels. December activity was the fifth highest monthly tally in two years.”
Regarding the Federal Tax Credit — Buyers who have a contract in place to purchase a primary residence by April 30, 2010, have until June 30, 2010, to finalize the transaction to qualify for a tax credit of up to $8,000 for first-time buyers and $6,500 for repeat buyers.
Here is the Regional Breakdown:
Northeast rose 2.3 percent over November and is 14.9 percent higher than December 2008.
Midwest increased 5.2 percent over November and is 8.7 percent above a year ago.
South rose 2.2 percent over November and is 5.5 percent higher than December 2008.
West fell 3.8 percent but is 18.6 percent above a year ago.
The extended and expanded tax credit will encourage 2.4 million more households to take the credit in 2010. “While new-home sales will remain low due to a lack of construction, existing-home sales are projected to rise to around 5.6 million in 2010,” Yun said. Last year there were 5.16 million existing-home sales.
He added that one of the greatest benefits of rising sales will be firming home prices. “For several months now we’ve been seeing stabilization in all of the home price measures as inventory is pulled down,” Yun said. “As a result, the housing wealth for many middle class families has begun to stabilize.”
I totally agree and cannot emphase enough the incredible window of opportunties that is being presented to investors right now. We have a tremendous amount of motivated sellers/bankers who need to unload their foreclosures. At the same time we have a flock of buyers looking for move-in ready homes at great values, in time to take advantage of their tax credit and low interest rates. We can buy low, fix and sell quickly (now that HUD removed the 90 day flip rule) and make a ton of money in the middle. And, you don’t have to use your own money to do these deals.
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