I have been sitting here all evening working on Market Reports for Gwinnett County, GA. They won't be published for a little over a week, but there is a trend I wanted to highlight prior to the release of the reports...
December is NOT a banner months in Gwinnett County...
November rocked. There is no getting around it. Comparing November 2009 to November 2008, sales are showing up around 73%. November 2008 was rather weak, while December 2008 was strong by comparison.
December 2009 was actually down over 20% year over year. As mentioned, December 2008 was a sales blip, but I think we were expecting a little more this year.
Apparently the First Time Home Buyer Tax Credit really pushed sales up until the time is was originally slated to expire. But I think the problem is that sales that might have happened in December (if there hadn't been a credit) were pushed up into November.
This has been my fear for the last few months...
It is the basic argument against the First Time Home Buyer's Tax Credit. I have seen one study that claims that more than 4 in 5 sales to First Time Home Buyers would have happened regardless of the tax credit. In fact, the study calculated that each "created" sale cost $44,000. The other sales would have happened within the time-frame they happened, or they were scavenged from future sales.
We will know more as we move into the Spring selling period. If sales are strong, then I am wrong. However, if sales stay weak in the first and second quarter of 2010, then all we have done is move sales from one period to another. That isn't productive for the long term.
Keep an eye on the market...
One thing that is often forgotten is that market reports are snapshots of the past. We can guess and try to look forward, but trends can only be seen in the past... by several months. In fact, it generally takes 2-4 months to identify and prove a trend. Even then, it might not continue to move the same direction.
I have seen all sorts of sources declaring that the housing crisis had passed based on October and November data from 2009. In Gwinnett County, GA, we were up 18.5% and 72.7%, respectively. But December looks to be reversing the trendline.
That means that buyers CAN'T count on data to reliably predict the future market. Trying to buy on the "bottom" is actually just a matter of luck. You might be in the area... but that doesn't mean you can hit it on purpose.
Lane - very well said and certainly holds true here as well. I thought for a moment we had passed a sticking point only to see that we are still declining in some areas. ~Rita
Rita - I need to crunch the new numbers to see how we are shaping up in January...