Friday, June 4, 2010

First Time Homebuyer Tax Credit: How Long Will Funds Last?

These estimates give a general idea of the number of applications received and the amount requested for the First-Time Buyer Credit. 57% of the estimated requested credit is shown since the $100 million cap will only be reduced by 57% of the credit allocated to the buyer. The amounts do not reflect actual amounts which will be allocated. Once the state determines that they have received sufficient applications to allocate the full $100 million, they will stop accepting applications for the First-Time Buyer Credit. There is also a separate "New Home" Credit.
First-Time Buyer Credit Applications
As of # Apps Received 57% of Estimated Requested Credit
05/04/10 430 $ 2,351,000
05/11/10 2,470 $ 13,283,000
05/18/10 4,830 $ 25,473,000
05/25/10 7,330 $ 38,357,000
06/01/10 9,760 $ 50,948,000

Applications are quickly absorbing available funds.
At this rate, I don't expect the credit to last much past July 2010.

San Diego Median Resale Price Chart Spring 2010

Housing Prices Improve 6.8%

House prices rose 6.8% in May 2010 from last year. A report from real estate data provider Clear Capital states that this is the largest yearly increase since July 2006.

Last year Clear Capital reported a 19.3% drop in May house prices from the previous year.

"We continue to see sustained price growth throughout much of the country with yearly price gains reflecting the housing recovery off of last year's lows," said Alex Villacorta, senior statistician at Clear Capital. "The expiration of the tax credit at the end of April has certainly contributed to the growth of prices we are observing and as more sales close before the June 30 deadline we expect that markets across the country will continue to see strengthening of prices."

The amount of REO properties on the market appears to be declining, too, according to Clear Capital. The national REO saturation rate dropped 27.8%, down from 41.7% last year.

"This dramatic shift in price trends reflects the unprecedented volatility over the last couple of years and the delicate state of local real estate markets around the country," Villacorta said.