Drop in U.S. Property Market Sales
After a slight increase in the property sales of US real estate in the last year and due to the support provided by the government, again there has been a decline in the sales of December 2009 due to the significant decrease in popular tax credit. Experts say that this sharp decline shows that self-sustaining recovery of the US real estate without Government supportive programs is doubtful. But on the overall, recovery has been observed from its crash three years ago.
Analysts say that this recovery is due to the implementation of tax credit and low mortgage rates for the new buyers. At first the tax credit facility was up to the end of November 2009 so, there was a gush of home buyers in November in order to get eligible for the credit. But, once this facility was extended until June 2010, there was also a break from the buyers in December since they had much more time left until June 2010.
Analysts hope that this time extension will increase the sales in the upcoming period but at the same time, they are concerned that the sales may go down again once the homebuyer tax credit facility ends in June 2010; and thus, may also be due to a hike in the mortgage rates. Because the mortgage rates were lowered by the Federal Reserve’s program, the US central bank is supposed to close this in March 2010.
Good news among all these ups and downs is that the number of houses kept for sale last December was reduced to 3.29 million units, the bottom score since March 2006. But analysts feel that the decrease in the availability of homes for sale is dangerous and decisive for the market’s recovery and the country could be facing with a national housing shortage this year.
Apart from this, there is also the need to worry about the increasing number of the unemployed. The real estate market is undergoing through ups and downs determined by the tax credit. Very soon in 2010, hopefully there will be equilibrium between the inventory and the sales of the housing market and the whole market should be benefited.
The situation of the job market on the other hand is alarming and its poor status can damage the recovery of the housing market. So, there is every need for providing new jobs to allow a continuous and stable recovery.
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