Current Housing Market Conditions, Outlook for Second Half of 2010
June 9, 2010
By Scott Ahlum, Director of East Sales
Although home sales increased more than expected in April, real estate experts are concerned that the housing market may face renewed downward pressure in the second half of 2010. The National Association of REALTORS® reported this week that sales of pre-owned homes in April rose nearly 8 percent compared to March and close to 23 percent from April 2009. Even more encouraging is the fact that the average price of an existing home was $173,100 in April, the best price gain since the summer of 2006.
These optimistic trends can be attributed to several factors, including:
- Home prices falling from highs that were reached during the housing boom have helped restore affordability in many markets
- Interest rates on 30-year fixed mortgages remained at very favorable levels in April
- Recent government data suggests that the labor market is finally showing signs of recovery after a long period of job losses
- The tax credit of up to $8,000 for qualified buyers who signed a sales contract before April 30 and closed on the transaction before June 30
Many experts anticipate home sales to slow now that the tax credit has 
expired. The thought is that the tax credit helped pull many of these sales forward, sales that otherwise may have happened later in the year. Also, the inventory of unsold homes increased in April as the average number of months that homes spent on the market hit 8.4 from 8.1 in March. The recent improvement in the real estate market also may convince more sellers to list properties, increasing the supply and potentially pushing prices back down during the second half of the year.
While lower prices, more affordable mortgages and government tax credits have caused the recent increase in the real estate market, factors such as the backlog of distressed homes remaining high, difficulty in getting home loans backed and the slow recovery of the job market lead the experts to believe the recovery may slow in the second half of this calendar year.
What are your thoughts and experiences with the current and future real estate market?
Filed under: Industry Insight
