Housing Sales Numbers

While home sales stats are likely to focus on a weakening market through the end of 2010 and the first half of 2011, it’s tempting to attribute the bleak numbers to a deteriorating housing market but an economist with the Real Estate Center at Texas A&M University said that doesn’t tell the whole story.

“The year-over-year decline in existing home sales will be the result of comparing months when there was no tax credit with those from a year earlier, when the tax credit was artificially increasing sales,” said Dr. Mark Dotzour, the Center’s chief economist.

The $8,000 tax credit for first-time home buyers went into effect in January 2009 and was planned to expire in November 2009 so home sales gradually started to increase after the tax credit was announced. Sales spiked before the tax credit was scheduled to expire so comparisons on a month to month yearly basis will not be an accurate assessment of the housing market since sales during the tax credit were artificially stimulated. While the tax credit did not apply to many purchasers in Big Canoe it did help them sell their homes so they could buy in Big Canoe.