Written by Jim Stewart, VP & Marketing Director, Assist 2 Sell, Springfield
Posted 12/2/2009

Conventional wisdom says that spring is when the traditional home selling season starts. Right? Conventional wisdom in this case is usually, at least partially, correct but it won’t be true in 2010. If you wait until April or later to list your home your chances of selling in 2010 will probably be significantly reduced. Why, you ask? Two words: “Tax Credits”.

Home sales in October and November 2009 were up as much as 40% largely because of an $8000 first-time home buyer tax credit. The credit was supposed to expire on November 30th but President Obama extended the credit through April 30th, 2010. The credit was also expanded to include a $6,500 credit for some non-first-time home buyers. The problem is that Congress and the President have made it clear that this is the last extension of the credit. After April 30th, there will be no further stimulus of the housing market. What does that mean to you? Mainly, if you don’t sell in the first four months of the year your task may become significantly more difficult.

The consensus throughout the real estate industry is that without the first-time home buyer tax credit, sales of homes in 2009 would have been far fewer. Consider auto sales as a predictor of home sales. Like real estate, the car industry needed the “cash for clunkers” program to stimulate demand for autos as sales before the program were abysmal. Unfortunately for the auto industry, when the “clunkers” program ended sales of autos fell off a cliff, yet again. The same thing is likely to happen in the real estate market after April 30th. The spring selling season typically starts in April and peaks in earnest in May, June and July. However, because of the pending tax credit expiration, sales will probably start to rise in February and peak in April or May. Therefore, if you wait to list your home until April or May you may have missed your best chance to sell in 2010. There is a general industry wide consensus that sales of homes in the second half of 2010 will be much worse that the first half. In fact, some industry analysts are expecting 2010 to be the low point for the sale of homes in America.

Don’t get me wrong, life for home sellers doesn’t end on May 1st, 2010. Homes will continue to sell after April 30th; it’s just that fewer will sell. But, the extension and expansion of the tax credit gives sellers who didn’t sell in the last few months, or who want to sell next spring, a chance that they wouldn’t have had if the original November 30th, 2009 expiration would have been allowed to take place. As you’ve heard on TV many times, this is a limited time offer only while supplies last. In this case “supplies” will only last until April 30th, 2010. After that, we’re on our own.