New Numbers: Is Housing Bouncing Back?
Dec. 9, 2009 — -- A new report that shows a large drop in home and condominium listings in the nation's biggest metropolitan areas is fueling speculation the housing market could be on the cusp of a positive trend for the new year.
The survey, conducted by Zip Realty, found that the number of condo and single-family homes listed in 27 major markets dropped in November -- down 28 percent compared to the same time last year.
The biggest drops were made in the western United States, where listings in several major cities in California are down to more than half what they were last November. In Las Vegas, a city hit especially hard by the housing bubble, the number of home listings is down 50 percent.
The drop in listings is welcomed news because it means people are buying homes. The change in the market also means those trying to sell houses are not facing the same challenging conditions as last year.
The decrease in housing supply can be traced directly to the Obama administration's first-time homebuyer tax credit. That credit was originally set to expire at the end of November 2009 so a lot of people rushed to buy a house before it was too late.
As of September, the IRS estimated that the program has helped 1.4 million tax-payers and the National Association of Realtors estimated that 350,000 homes have been sold as a direct result of the program. On Nov. 6 President Barack Obama extended the program through the end of April, 2010.
Beyond the extension, the tax credit program also expanded an additional credit to repeat home buyers.
For homes purchased after Nov. 6, home buyers are eligible for a tax credit of 10 percent of the sale price -- up to $6,500 for the purchase of a house.
But the program is not without stipulations. First, repeat buyers must have lived in their current home for at least five consecutive years of the last eight and the new home cannot be more than $800,000. The new home sale must occur by June 30, 2010, but a binding sales contract must be in force by April 30, 2010. The buyer must also make $125,000 or less and a married couple cannot make more than $225,000.
