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June 4, 2010

New-home sales after the home buyer tax credit

Another postcard from May, the first month sans the first-time home buyer tax credit:

Metrostudy, which does market research for the home building industry, says early figures show a big falloff in new-home contracts signed in May in once-bubbly markets such as Las Vegas.

But not here.

Kenneth Wenhold, director of the Mid-Atlantic region for Metrostudy, said numbers for the Baltimore-Washington area suggest "traffic and contracts per project has changed very little from April to May, implying that we should not have a significant 'hangover' from the tax credit expiration."

"On average, traffic and contracts are trending similarly to what we saw during this time of year in 2009, resulting in a conversion ratio which is also on par with 2009," he wrote in an email.

About a week into May, Crofton-based homebuilder Caruso Homes told me it was seeing a pop in sales after the tax credit. People who'd just sold their homes were looking to close on a new place quickly.

May contract numbers for resales (and any new homes on the multiple-listing service) will be released next Thursday, so we'll see how the wider market fared.

Some of you shared what you've noticed in your community:

"Since the credit has expired a couple homes for sale in my neighborhood have been taken off the market, and the others have seen pretty substantial price reductions," Wonk reader Mary wrote, adding in a parenthetical: "Not that the sellers still aren't trying to make a beyond-decent profit..."

Jelena, who has long been trying to find a home, reports back with her experience: "In our modest price range the market has been completely stagnant for the last 2 months. No houses are coming up for sale and nothing is being sold. The listing updates are mostly finalized sales from the credit times and price drops on the properties already on the market. I've also seen some properties just taken off the market after the credit expiration."


I agree - home sales did fall, but we need to look on the positive side. People are buying :)

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About Jamie Smith Hopkins
Jamie Smith Hopkins, a Baltimore Sun reporter since 1999, writes about the regional economy. Her reporting on the housing market has won national and local awards. Hopkins is a Columbia native and has lived in Maryland all her life, save for 10 months spent covering schools in Ames, Iowa.
She trained to become a wonk by spending large chunks of time as a geek and an insufferable know-it-all.
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