Sure, we saw a spike in home sales in April. And other indicators suggest that unemployment claims have leveled off. But this does NOT mean we’re headed out of our economic mess any time soon.
The expiration of the federal tax incentive for home buyers can be credited for April’s boost in sales. While that activity was nice to see, many markets still report housing prices falling as well as a steady increase in the number of bank owned properties. Watch very carefully what happens to sales in the next couple of months; we’re guessing a dramatic decrease in buying activity will occur.
And let’s not be fooled by stories of unemployment claims leveling off. That may be the case but all those who are unemployed still need to get jobs before they can consider buying a home. Reports claim that this will be an incredibly tough time for 2010 college graduates because so many companies are in a hiring freeze. And many unemployed are resorting to the typical teenage summer jobs, just so they can put food on the table.
We’ve still got a long way to go…
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[…] Economists and real estate experts expect housing sales to remain depressed during the third quarter as lending standards remain strict and home construction remains slow. The market is also dependent on unemployment stabilizing and salaries increasing. When those start to happen and people feel more job security, we’ll see a real estate market recovery. […]