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August 10th, 2010 2:41 PM by David W. Welch
The Orlando Sentinel article about July's sales statistics of course had to mention the dreaded double dip. I have to disagree with the conclusion that the drop in prices from June to July portends the dip that some economists have been predicting. What we actually saw earlier in the year were false positives created by the home buyer tax credit. If you read my blog regularly, you know I don't really credit the tax credit (pun intended) with creating any new sales. Most of the buyers taking advantage of the credit would have bought regardless of the incentive. What it really did was give some buyers a reason to make their purchases a little earlier than they would have. The looming deadlines to contract by April 30th and close by June 30th (now September), may have pressed some buyers to offer a little more to get the deal done.
While the credit applied to both first time and repeat buyers, first timers were the ones really taking advantage of the credit. They also tend to purchase less expensive homes which have a lot of buyers vying for them. It has been very common to make five or ten offer before getting a home under contract in the lower price ranges. Buyers desperate to take advantage of the credit, may have offered a bit more to get properties under contract. The drop in the number of sales can also be attributed to the expiration of the tax credit. Over 3,000 sales closed in June, but the 2,300 in July is right in line with prior months. Look for sales in August and September to drop a little further with school starting back up. The typical buyer seasonal trends are showing up again. I expect 2010 to finish much stronger than 2009, and 2011 is poised to show more improvement in the Orlando real estate market.
David Welch Real Estate Optimist, Orlando Real Estate