With the 1st time buyer tax credit being extended and expanded, will December and January be the best time for buyers to pull the trigger?

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By Dina ElBoghdady
Washington Post Staff Writer
Monday, November 23, 2009

Sales of previously owned homes jumped 10.1 percent in October from September to their highest pace in more than two years, driven in part by a lucrative tax credit for first-time home buyers, according to industry data released Monday.

The National Association of Realtors reported that sales of existing single family homes, townhomes and condominiums surged to a seasonally adjusted annual rate of 6.10 million units last month from a downwardly revised rate of 5.54 million in September -- the highest pace since February 2007. Sales were up 23.5 percent from the same time last year.

Every region in the country experienced a pick-up in sales. Meanwhile, the national median home price fell 7.1 percent to $173,100 in October compared to the same time last year.

The low prices, historically low interest rates and the tax credit all played a part in boosting sales and clearing out an oversupply of homes, particularly the aggressively priced foreclosures, which tend to drag down home prices, economists said. Foreclosures and other distressed properties made up 30 percent of sales last month.

The supply of homes at the end of October fell 3.7 percent to 3.57 million, the lowest level in more than two-and-a-half years, said Lawrence Yun, the realtor group's chief economist. If sales were to continue at the current pace, it would take seven months to sell them. A healthy range is typically six months.

Yun singled out the tax credit as playing the biggest role in energizing buyers. The $8,000 tax credit was to expire on Nov. 30 and many buyers were rushing to beat the deadline, Yun said.

Source: Washington Post. View Article.

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