The National Association of Realtors recently predicted that real estate nationwide will see a 4% gain in appreciating values in 2010. This might seem far-fetched but if the extended and expanded tax credits have their desired effect...such gain in value isn't too outrageous.
The extension of the $8k tax credit and the new $6500 credit for repeat buyers aims to entice more people to buy a home between now and June. A large influx of buyers in the next 6 months would deplete the inventory of homes for sale, thus causing prices to
stabalize and theoretically rise in some markets.
The big question in my mind however will be what the market activity looks like after the credits finally expire for good. If everyone thinking of buying in the next 2 years decides to buy early to get their government money, then what happens after the credit runs out? Who will be in the market to buy a home? Granted, people always need to move...but we'll really see the health of the real estate market when people aren't getting fat $8,000 or $6,500 checks in the mail.
This past spring and summer, Seattle certainly saw bidding wars for nice homes under $400k. So perhaps any appreciation will be dependent on the price point, city, neighborhood and type of home. But in the end, that's how it always works...
Read full article here.
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