As soon as the Homebuyers Tax credit expired, housing prices declined in three of the four main housing sectors. The real estate research firm of Campbell Surveys released their June report showing the following changes:
· Prices for move-in ready foreclosed properties fell by 8.8 percent
· Prices of the average short sale declined by 6.3 percent
· Prices for non-distressed housing fell by 4.6 percent
· Prices for damaged foreclosed properties increased by 5.9 percent.
“These price declines are related to the decreased homebuyer demand surrounding the end of the tax credit,” said Thomas Popik, the research director at Campbell. “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 Campbell Survey confirmed with miscellaneous reports from local real estate agents who say that today’s buyers begin negotiations by discounting $8,000. So although prospective buyers may have missed out on the federal tax credit, they are capturing it through their lower offers.
The Campbell Survey indicates that declining housing prices are expected to decline through August. The Campbell survey includes information obtained from 3,000 real estate agents. Pricing analysis is based upon contracts closed through June. However, the interviewed real estate agents indicated that contracts scheduled to close in July and August were significantly lower than those closed in June.
This is bad news for the troubled housing market but good news for serious real estate investors. One surprising report seems to suggest that Florida real estate is making a comeback. Prices are still depressed, but the volume of sales is on the rise.
Analysts believe Florida is one state where investors see potential. Supply is high and the seasonal rental demand remains high. That formula spells profit for most investors.