The First Time Homebuyers Tax Credit that expired April 30th is playing out and soon the real estate market will be left to fend for itself. Buyers have until June 30th to close their deals to reap the benefits.Many real estate agents in Louisville described April as a mad scramble. The effect was felt in Mt. Washington too. The tax credit created a wave of buying and thus the law of waves applies: the higher the crest the deeper the trough.
Pending sales are up in March and April of this year by about 28% over 2009 and our "May Effect" is stronger too. Sales volume dropped a precipitous 35% in ‘09 this year it plummeted 53%.
So far there is no noticeable affect on prices. As the summer continues the rest of the story will unfold and we’ll know if prices are holding or sinking.
For the time being interest rates at or below 5% for 30 year fixed mortgages will continue to be an incentive to buy and will help drive demand.
Stay tuned for an update on how prices hold up.
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