RealEstateEconomyWatch.com

As record snows melt away in the Midwest and East, real estate professionals are not seeing the volume of interest or which they had hoped. Despite the expansion and extension of the Federal tax credit, low mortgage rates, robust inventories, and prices as low as they have been in years, expectations are low as the real estate industry enters the 2010 home buyer season.
Like a skunk at a picnic, the January existing sales and pending sales reports from the National Association of Realtors surprised many and drastically lowered expectations for the spring. Existing sales fell after several months of tax credit fervor in the fall. Based on contracts signed in January, pending sales fell 7.6 percent to 90.4 from an upwardly revised 97.8 in December, but remains 12.3 percent higher than January 2009 when it was 80.5.
Reports from across the country are markedly low key as we enter the middle days of March, a time when traditionally the spring sales season is well underway. 
In Las Vegas, contracts on listings are up 845 units over January, not a huge number for that market. New listings are down 213 units and closings are down 987 units. Much of the pending inventory is short sales which require LONGER close times. December's sales were unusually high and January's numbers are still higher than last January. 
In west Georgia, the tax credit boosted sales last year, as in most places, but now fears are growing the market will retrench. 
"It has had a very good effect on the market, but I have a feeling the market may do what the automobile market did after the Cash for Clunkers program went away," said Dwayne Hicks, a broker with United Country West Georgia Realty in Carrollton. "The market does not have enough legs on it yet to stand, and I think the biggest thing right now is nobody has ever seen a jobless recovery and it's a little bit tough to see a rebound taking hold if people can't buy anything, certainly not a home or a car, because they're concerned about their job."
In New York's Hudson Valley, sales and price figures across the region are down dramatically. February was the slowest month for home sales that Orange County has seen in years, and Sullivan County didn't fare much better. The frigid market is a function of the general economic malaise, combined with the biggest blizzard in years.
"The weather just knocked out a ton of closings," said Joseph Rand, managing partner of Better Homes and Gardens Rand Realty.
Rand added that, following last fall's tax-incentive-fueled rally, the real-estate market has been going through a lull for the past two months. "We're expecting that to change in March and April," Rand said.
In her annual housing analysis, Diane Swonk, chief economist of Mesirow Financial, also expects the tax credit to have a greater impact this spring than is evident so far.
"The hope is that the tax credit gets us over the hump and into a more favorable environment on employment. Existing sales are expected to outperform new sales, mostly because of the deals available in the existing market. We should also see some return of luxury sales, as wealthier buyers start looking for deals."
But she doesn't hold high hopes for a year as a whole.
"[T]he level of activity that we see in the market is expected to remain near historic lows and more consistent with a recession (depression?) than recovery. Indeed, nobody in the housing industry is forecasting anything close to what would be considered a 'normal' level of activity until 2012," writes Swonk.