The Real Estate Market Continues to Improve

There’s welcome economic news on the front pages of various newspapers and blogs lately, with many of these publications touting the recent consistent improvements in the real estate market as a positive indication that we’re slowly climbing out of a very dark financial crisis. For many real estate agents, the last 24 months or so has been a true test of their prowess as a savvy business survivor. With housing markets plummeting and clients few and far between, agents have had to make fundamental changes to their businesses to cope with a harsh and unforgiving real estate landscape. There’s no telling how many careers were claimed in the economic downturn, and nothing thins the herd like the bursting of a very big bubble.

In the biggest effort to continue the positive economic swing, President Barack Obama and Congress have continued to pile on the support for the housing market, extending the first-time home buyer tax credit and expanding the bill to include move-ups and other home buyers. Initially, as part of the Housing and Economic Recovery Act of 2008, Congress first created a $7,500 first-time home buyer tax credit for individuals who purchased a home between April 8, 2008, and July 1, 2009. Later, Congress extended the credit to November 30th, 2009 and raised it to an $8,000 tax credit. Most recently, the credit has been extended to April 30th, 2010, with approval being reached just weeks before the November deadline. In addition, a new tax credit of up to $6,500 is available to existing homeowners who buy a new home or have one built by April 30, 2010, if they owned their existing home for five consecutive years over the last eight years.

These credits, as the data shows, have been responsible for much of the housing recovery, with the President and Congress hoping the additional extension and expansion will continue to fuel investment. The National Association of Realtors says as many as 1.2 million transactions for new and resale homes were completed specifically because of the first-time home buyer tax credit. As evidence for home buyers using the credit as a big reason to make the leap into ownership, the looming November 2009 deadline caused new home sales to slip 3.6 percent in September. With the extension and expansion of the credit, economists expect these numbers to turn positive quickly.

In regards to market conditions in the U.S., sales increased from the second quarter in almost all 50 states, while 28 states and D.C. saw double-digit gains. Year-over-year sales were also higher in more than half the states. All geographic regions of the U.S. saw 3rd quarter gains as well, with the Northeast leading the way at a 16.7 percent increase, the Midwest at 13.2 percent, the South at 11.3 percent, and the West at 5.6 percent.

Is the worst over? Most leading economists, agents, brokers and NAR representatives agree that the right tools are in place to stabilize the market and stem the foreclosures that were so rampant just a few months ago. With the tax credit extension, first-time buyers will be pushed to get a contract in place by the end of April of 2010, adding to the recovery.

As an agent, if you’ve survived this crisis, you’ve probably learned more about yourself and the industry than you expected. Most importantly however, it’s time to take the survival skills you’re now familiar with and apply them to your business with even more rigor. In my opinion, those who push now, market themselves intelligently and jump to the front of the line, will be the new beneficiaries once the market begins to pay dividends once more.