As the month of June progresses, the effects of the end of a federal tax credit are becoming clear. The real estate market that saw record activity all spring is now finding its level. The chart above compares 2010 sale pending activity (indicated by the red and yellow areas) to 2009 activity (indicated by the blue line).
As 2010 started off, Pending sales climbed above 2009 levels at a fast pace. The tax credit officially ended on April 30th and by May 3rd the number of Pendings had peaked at 2,159. From that date on, without the tax credit incentive, activity slowed down.
On June 1st, the number Pending sales was at the same level as 2009. You will notice that the 2010 chart changes from Red to Yellow at that point. I wanted to make the point where activity dropped below last years activity stand out. As of today (June 18th) the number of Pending sales on the books was at 1,290, compared to 1,688 a year ago.
We have seen this drop off before. Last November when the previous tax credit was to expire, buyers backed away from the offer table and there was a drop all the way until the end of the year.
How far will this current drop go? Only time will tell but I do predict an increase in Pending sales in the next 30 days. With the late ending of the school year, many families have taken off immediately after the last days of school on vacations. We typically see a dip (as shown above in the blue line) and then another dip as the July 4th holiday hits.
We certainly are living in interesting times. If you are interested in seeing more real estate statistics, be sure and click on Des Moines Housing Statistics from my main website (www.desmoineshomeinfo.com) or go directly to the stats page by going to www.remarketpulse.com.