The race is on to get FTHBs in contract....Negotiations continue for extension. What do you think? Will they extend this successful program?Any thoughts on why the Gov would end this type of insentive just as real estate is heading into the winter months which are slower for most areas outside the Southern states?Anticipated home sales have increased for seven straight months, the longest upward run since the National Association of Realtors (NAR) began its pending sales index series back in 2001, and now at its highest level since March 2007.NAR said Thursday that its forward-looking measurement of closed sales on existing-homes, which is based on contracts signed in August, rose 6.4 percent from July’s reading and is 12.4 percent above this time last year.Lawrence Yun, NAR’s chief economist, cautioned though, that not all contracts are turning into closed sales within the expected timeframe. “The rise in pending home sales shows buyers are returning to the market and signing contracts, but deals are not necessarily closing because of long delays related to short sales, and issues regarding complex new appraisal rules,” Yun said.Yun agrees with many other market observers that first-time buyers are rushing to put pen to paper to beat the deadline for the $8,000 tax credit, which expires at the end of next month. This run could very easily result in inflated pending sales numbers that don’t make it to the closing desk in time.Prospective homeowners in the western region of the country are the most eager to sign the dotted line, where distressed assets and plummeting property values make for extremely attractive deals. The pending sales index for the West surged 16.0 percent in NAR’s latest study.In the northeastern states, anticipated sales jumped 8.2 percent. In the Midwest the index rose 3.1 percent, and in the southern part of the country, pending home sales increased 0.8 percent.“Perhaps the real question,” Yun said, “is how many transactions are being delayed in the pipeline, and how many are being cancelled?”Yun also noted that the data sample coverage for pending sales is smaller than the measurement for closed existing-home sales, so the two series will never match one for one.Yun said the forecast for home sales and prices depends very much on whether a tax credit is extended. “All we can say for certain is sales will decline when the tax credit expires because we are not yet on a self-sustaining recovery path. It also raises a risk of a double-dip recession,” he said. “Extending and expanding the tax credit is the best tool in our arsenal to encourage financially qualified buyers to stimulate the economy.”
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  • I agree Johnny, but you know our government just loves to fool around with things. I really makes no sense to me why they would even think of ending it just as 3/4 of the country is going into the slower winter season. You would think they would want to stimulate the market during the down time.
  • Why don't they make the tax credit permanent? Extending it just makes the market stimulate, but it creates a false economy. If they stop it, would people stop buying? I don't think so, but it won't be in such a volume that inflates it either. Time will allow the markets to recover, if people behave themselves.
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