A recent report out of Washington stated that previously occupied home sales for 2009 rose for the first time in 4 years. The numbers for the year reflected an increase even though December lost sales for the same time one year prior. The down side to these positive sales numbers is that prices fell 12% over all.
Home prices have not fallen this much since the great depression of the 1930′s. Median prices across the nation have fallen to $173,500. This price indicates that the market is not strong enough to sustain an economic recovery.
Economists strongly believe that the positive numbers that we have seen over the past 24 months is a direct result of the governments’ involvement and the many recovery programs that they have fostered. Concerns are beginning to surface about what the health of the market will be like once the Federal Reserve stops buying mortgage backed securities in March. It is being estimated that home loan interest rates could swell to 6.0%. Adding gas to the housing market fire is the expiration of the federal housing tax credit. Analysts agree that the conclusion of these two government backed assistance programs could send the market spiraling downward once again.
Real estate agents are weighing in saying that they believe the first quarters sales in 2010 will reassure borrowers that buying a home is once again back in style. They agree that December’s low sales numbers were the result of the governments’ extension of the federal tax credit program that was pushed forward from Nov 2009 to April 2010. This extension took unwanted pressure off of buyers who were on the fence; giving them additional time to purchase a home and still qualify for the tax credit.
No one can say for sure how the market is going to respond once these governmental support beams are removed. What is for sure is that the second quarter is guaranteed to see a shift in a housing market that is receiving life support from governmental assistance programs, to a free and independent market that must balance it’s self if there is any real hope for its future.
Mitch Mitchell is a consultant who writes and participates in many different fields, including real estate finance issues. 
A 6% interest rate is still very low historically speaking. Buyers who don’t buy because of it are just jaded.
The sooner the fed gets out of the way the better. Not only for the housing market, but for all of the free market.
.-= Matt@Atlanta GA Homes´s last blog ..Details on New Tax Credit Extension =-.
It had to go up eventually. I agree buyers are jaded if they don’t think 6% is a low rate. I remember thinking 8% was fantastic.
.-= Chas@Las Vegas Real Estate´s last blog ..A Rise in the Condo Market =-.
Difficult to be to optimistic at the moment. Our market in Spain is still officially in recession. The property market was a huge contributor to Spanish GDP. The new build market faces huge challenges in Spain. It is difficult to see how the Spanish economy can recover without it. Having said that prices have fallen dramatically and many properties now look really affordable. Hopefully this will move things forward.
In the Austin real estate market we saw strong sales in October and November but December and January were pretty slow (taking into account seasonal variations).
.-= Ki@Austin Real Estate´s last blog ..Austin Real Estate Statistics for December =-.
The French Property Market is showing signs of recovery (along with the French economy). It is patchy with rural property still relatively cheap; more expensive in the majotr towns. On more expensive property great discounts are still available so negotiate strongly!
.-= Francophile@France Facts´s last blog ..Renting a Property in France =-.
In our real estate market, we have seen some good curves when it comes to home sales. But still we can’t go with the changing demand curve as month passes by… Prices vary and depends on the real estate being sold in the market. It is just a matter of good buying and selling trends that make it up for real estate market. Good post! Keep it up!
.-= Orem Utah Homes´s last blog ..Previewing February’s New Home Sales: The numbers declined! =-.