When looking at today’s results it’s important to consider the effects of the $8000 government handout to first time “homebuyers”.
Obviously this Realtor bailout is driving sales, especially in the Western region where prices have fallen over 40%, but like the “cash for clunkers” program, in all likelihood the government is simply moving demand forward as well as interfering with demand in the future.
For example, one feature of the $8000 first time home buyers tax credit is that “home buyers” need to repay the handout if they should decide to sell their home (single family, condo, etc.) within three years… a likely cause of unpredictable future demand patterns.
Meanwhile, the NARs chief economist Lawrence Yun continues to bask in the glow of increasing home sales activity, even if it took a taxpayer funded bailout of his shameless industry to provide the artificial circumstances leading to this “recovery”.
Further, as an added insult, Yun insinuates that prices may be turning higher clearly signaling that the NAR has pulled out the old playbook and is preparing to resume their pre-bust propaganda.
“The recovery is broad-based across many parts of the country. Housing affordability has been at record highs this year with the added stimulus of a first-time buyer tax credit, … Other buyers are taking advantage of low home values before prices turn higher.”
Look at the July seasonally adjusted pending home sales results and draw your own conclusion:
- Nationally the index increased 12% as compared to July 2008.
- The Northeast region increased 4.7% as compared to July 2008.
- The Midwest region increased 8.1% as compared to July 2008.
- The South region increased 12% as compared to July 2008.
- The West region increased 20% as compared to July 2008.