Wednesday, June 23, 2010

NYT on the Housing Market Slowdown

Speaking of New York Times features on the real estate market and mortgage crisis, they had this one last week: Housing Market Slows as Buyers Get Picky.  

Before the recession, people simply looked for a house to buy. Later they got squeamish just thinking about buying. Now they are on a quest for perfection at the perfect price. . . . 

It is a reversal of roles from the boom, when competing buyers were sometimes reduced to writing heartfelt letters saying how much they loved the house and how they promised to eternally worship the memory of the previous owners. These days, it is the buyers who are coldly seeking the absolute best deal while the sellers are left in emotional turmoil.

“We see buyers who must have learned their moves from the World Wrestling Federation,” said Glenn Kelman, chief executive of the online broker Redfin. “They think the final smack-down occurs at the inspection, where the seller will be reluctant to refuse any demand because the alternative is putting the house back on the market as damaged goods.”

Everyone expected the housing market to suffer at least a temporary hangover after the government’s $8,000 tax credit expired, but not necessarily this much. Preliminary data from around the country indicates that the housing market began swooning last month immediately after the credit was no longer available. In some places, sales dropped more than 20 percent from May 2009, when the worst of the financial crisis had subsided. 

Bad news for the housing and construction industries, and a possible signal of a double-dip recession.  I think that last part about the $8000 tax credit is telling.  Once again, the market for housing was artificially propped up by a policy decision to promote home ownership.


Matt Festa

http://lawprofessors.typepad.com/land_use/2010/06/nyt-on-the-housing-market-slowdown.html

Financial Crisis, Housing, Mortgage Crisis, Mortgages, Real Estate Transactions | Permalink

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Comments

I am very glad our home sold right before the credit expired!

Posted by: Sid Burgess | Jun 24, 2010 2:25:08 AM

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