This year has brought ups and downs and has proven to be a mild success for the housing market for the first six months. With unemployment rates a bit healthier (Texas is currently hovering around 8.2% while the country’s employment remained fairly stagnant), the economy has started to see some hopes for recovery based on employment and housing data reports.
As noted in previous blogs, the housing market improved year over year from 2009 to 2010 for the first six months, but much of this can be attributed to the government tax credit which was in place for most of the spring of 2010. Nationally, existing single-family home sales were up 12.4 percent, but new home sales actually fell 1.6 percent when comparing the first six months of 2009 with the first six months of 2010.
Home buyers could purchase homes through April 30, 2010 and still qualify for the tax credit if they closed on the home purchase by September, 30, 2010. Given this, in May 2010 the market did see a reduction in pending home sales with June and July seeing a considerable drop in home sales as well. Home sales fell in May by 23.5 percent and June posted a 19 percent reduction. January-April seemed to steer the first six months in a positive direction despite the dreary figures from May and June.
The second part of the year has already seen unfortunate housing data. For example, in July 2010, sales were down 26.5 percent from July of 2009. According to the Real Estate Center at Texas A&M University, “Statistically, the second half of 2010 (and perhaps early 2011) could be misleading. If the general economy does not improve, the housing market will continue to be weak, and will perhaps look even weaker than it really is. The government tax credit for buyers induced many to purchase homes rather than renting or to purchase earlier than they had planned. As sales were drawn forward, subsequent months will experience a drop off in volume.”
With foreclosure activity continuing, and actually picking up in Texas, the housing market is not out of the woods yet. Without the tax credit, the latter part of 2010 may not see such a rosy outcome.
It is still a buyer’s market and if you are interested in finding a new home in Texas then visit Save On A New Home to find your dream home and save thousands.
