M1EK,

Yes, this was wrong aon the 17 month lookback graph. I transposed some numbers. I’ve corrected it (you may have to refresh your browser if the old graph still shows.

Interestingly, I went back to every month in the graph to double-check the nbumbers, just in case, some past months remained exactly the same and some change by very small amounts. The more recent the stats, the more likely they change. This is because of errors and corrections made to the data after I run the stats monthly. Also, some agents simply forget to enter their closed sales and do it a month later.

But what you pointed out was not caused by that, but by me. As a result though, every month has been double-checked and it changed the shape of the chart.

> How much do you think this tax incentive is “pushing forward” demand for the sub-$200k, tax-rebate qualified buyers?

TH,

Well, I’m closing one at noon today with an apartment dweller buyer for whom the $8,000 incentive was enough to get him seriously thinking about buying. The serious thinking lead to an awareness of interest rates and more general knowledge after talking with Sylvia. I’ll have to ask him point blank after closing today if he thinks we would have NOT bought at this time without the incentive, but I suspect he may not have based on earlier discussions.

> I fully expect sellers to have to lower their prices by at least 8k (the government incentive)

Mike, $8,000 represents 4% on a $200K sale. I think we might in fact see a slowdown after the incentive, but sellers have been stubborn about dropping prices for the past two years now and so I doubt we’re going to see big price drops. Instead, we might see the number of Expired/Withdrawn creep back up as sellers give up and pull off the market. Right now the “not solds” are at about 40%. They had climbed over 60% in the fall 2008. I don’t think we’ll see that again though.

Todd, I appreciate your good comments.

Steve

Steve

How much do you think this tax incentive is “pushing forward” demand for the sub-$200k, tax-rebate qualified buyers? The cash for clunkers program did the same thing in auto sales. It gave a great short-term boost in sales, but there is still a looming question (for cars and homes) as to whether these incentives created new demand, or simply encouraged people to buy now instead of next quarter, year, etc.

I wonder what will happen to inventory and sales levels on these same homes (South Austin, sub $200k) after Dec. 1st, if the rebate is not extended? You would think that anyone contemplating a home purchase in the next 6 to 12 months would take advantage of the factors that you outlined. The post-rebate buyer pool will be much smaller than it is now: primarily investors and relos, and maybe a small number of people that were existing owners and therefore would not qualify for the tax rebate (although there are not a lot of move-ups buyers looking for under $200k existing homes).

As an investor looking for another rental home or two in the South Austin area, I’m sitting on the sidelines until after some of this artificial demand is removed from the market after December 1, and think other investors should probably consider doing the same.

Thanks,
Tim