PrintPrices on homes ready to be occupied fell an average of 6.8 percent between May and June, but prices for damaged foreclosed properties increased by 5.9 percent during the same period, according to the latest Campbell/Inside Mortgage Finance Monthly Survey of Real Estate Market Conditions.
”These price declines are related to decreased homebuyer demand surrounding the end of the tax credit,” noted Thomas Popik, research director for Campbell Surveys. “Some housing market analysts had expected demand to remain strong through the end of June, but in retrospect it’s clear that the peak of first-time homebuyer activity occurred three months earlier, in March.”
The first-time homebuyer share of home purchase transactions was 42 percent in June, well below the 48 percent level in March. The first-timers declined with the end of the federal tax incentive of up to $8,000 on April 30.
However, investors buying damaged homes and fixing them up for sale or rent did not qualify for the credit. Prices on damaged foreclosures rose even as all other categories fell. Short sales in June fell an average 6.3 percent. All non-distressed properties fell 4.6 percent.
“Buyers just plan on deducting the $8,000 off what they are going to offer now. So, now prices are dropping to compensate for the credit not being available,” stated an agent located in Ohio who participated in the survey. “(With) the homebuyer tax credit coming to an end, I’ve noticed many of the homes reducing their list prices by $5,000 to $10,000 for prices in the over $150,000 range,” added an agent located in Pennsylvania.
Survey results suggest that home prices are likely to continue their decline in the months of July and August. Real estate agents were asked in the June survey, “With the end of the homebuyer tax credit, do you notice prices for contracts signed in June going up, down, or staying flat?” Agents responding “down” outnumbered those responding “up” by a ratio of 10 to 1.
The Campbell/Inside Mortgage Finance Monthly Survey of Real Estate Market Conditions surveys more than 3,000 real estate agents nationwide each month and provides up-to-date intelligence on home sales and mortgage usage patterns.
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