One of the top headlines in the Economy & Business section of the Washington Post on March 24, 2010 was “Existing-Home Sales Fall for Third Straight Month”. My first reaction was, “Here we go again, more gloom and doom from the press about the residential real estate market.” But then when I thought about it, perhaps there is a ray of light in these statistics. The graph illustrated in the article shows that the seasonally adjusted annual rate of existing-home sales in millions peaked in November 2009. The end of November 2009 was the original deadline set by Congress for first-time home buyers to contract and settle on a home in order to qualify for the up to $8,000 tax credit.

Sometime in November, 2009 Congress determined that the housing market had not recovered sufficiently and so extended the first-time home buyer credit to contract date by April 30, 2010 and settlement date by June 30, 2010. Further, Congress expanded the program to include a repeat home buyer tax credit of up to $6,500 to stimulate that part of the market.

Fannie Mae is quoted in the article to say, “Unfortunately, despite the high hopes associated with the extended and expanded home-buyer tax credit, housing activity appears to have faced a setback that went beyond the impact of adverse weather conditions.” First quarter 2010 saw some of the most severe winter in 112 years for parts of the United States. But these statistics apparently have accounted for that.

Housing inventory is still rising, which economists determine is due in part by lenders’ decision to put foreclosures on the market. Until home inventory is consistently in line with demand, the market has not fully recovered. According to Tim Quinlan, a Wells Fargo economist, “If we can just… stop the increase in inventory, we could finally get to a point where we’re turning the corner on the housing market.”

In my opinion if existing home sales were on a positive trajectory nationwide, Congress would be compelled to allow the home buyer tax credit to expire as scheduled. Since housing is such a critical component of a healthy United States economy, perhaps Congress will not pull the rug out from under a still recovering housing market and once again extend and perhaps even expand the tax credit. That’s the ray of light at the end of the tunnel I’d like to see.

This is a link to the article: http://bit.ly/d28gvR Should you or someone you know desire guidance from a professional Realtor, please visit our website for more information at: http://www.HuckabyBriscoe.com. Or contact Karen Briscoe with the Huckaby Briscoe Group at 703-734-0192 or Homes@HBGroup.us as we would be delighted to be of assistance.