Looking at the latest S&P/Case-Shiller (CSI) data it’s obvious that although the government’s housing tax subsidy worked to breathe new life into the New York regional (NY, and parts of NJ and CT) housing market, the effect was largely temporary.
The most notable effect materialized for “low tier” homes (homes currently priced less than $281,772) where prices jumped significantly during the spring and early summer of 2009 before reaching a peak in September.
Since then though, low tier prices have declined every month completely wiping out all gains logged in 2009 and dropping further to the lowest level seen since 2004.
Middle tier homes (homes currently prices between $281,772 and $428,806) have suffered a similar trend reaching a stimulated peak in September 2009 then moving lower to complete a total wipe out all of the gains seen in 2009.
High priced homes (homes currently priced above $428,806) are currently hovering just 0.14% above the low level reach in early 2009, a level that will more than likely be breach when the April data is compiled.
Of course, with the (final) extension of the housing tax gimmick having likely driven similar trends into April (the expiration month), it’s likely that the data will start to reflect a second artificial pop in prices effecting the May – July releases of the CSI.
Again though, this government-sponsored propping of prices will likely only be a short temporary reprieve from an ongoing and notable decline.