Moving On After the Tax Credit

Filed June 29, 2010

By Bill Primavera

The Home Guru

Whether we get our information about the state of the housing market from newspaper headlines or from a small gathering at an adult education seminar in a local public library, all of us considering selling or buying a home have been anxious to know what would happen after the $8,000 federal tax credit program expired on April 30. 

At the end of last week, when the Commerce Department reported a 33 percent decline in sales of new homes in May, compared with the month before, we got the gist of the matter.  But, not the whole picture.

As the  largest single decline reported since records have been kept by the Department, a span of 47 years, this announcement was certainly bad news, but somewhat misleading in that it focused on new home construction rather than existing home sales, which had not dipped as drastically. 

But still, the news was chilling, especially for those wanting to move on with their lives.

On the same day of the announcement, there was a small gathering of adults, mostly senior citizens, who had come to the reading room of the John C. Hart Public Library in Yorktown for an adult education seminar called “Real Estate 2010! State of the Market” with the subtitle, “Downsizing, Upgrading or Moving South.”  Considering the news, the topic was of timely relevance, and the questions from attendees, tinged with uncertainty, were telling.  Basically, they wanted to know, what could be ahead for us?

Housing analysts had hoped that the recent increased activity of the market, buoyed by the tax credit, would continue after its expiration.  This prospect was based on the adjusted sales prices of homes, combined with historically low mortgage interest rates which last week sank to 4.69 percent, the lowest in more than half a century. But obviously this good news was not enough to keep the momentum of home sales going.

The degree of disappointment varies with the region of the country. In our area, while we wait to see the results of this quarter’s report from the Westchester/Putnam Association of Realtors, those of us working with home sellers and buyers know that, while offers have slowed during the month of May and June, they have by no means fallen off the radar. 

Here, compared with last May, there is slightly improved activity in both the higher and lower ends but, as across the nation, prospective home sellers and buyers still remain largely on the sidelines. While sellers may be hoping that prices will appreciate once more, it doesn’t seem likely to happen soon, judging from historic cycles. And with prospective buyers, it doesn’t seem to be a matter of waiting until home prices drop still lower, but rather, one of concern about the state of the economy overall and the security of their jobs.

At the seminar, the mood was one of some concern, demonstrated by the prevalence of interest in the workings of short sales. But, while realistic, the presenters were upbeat. All associated with Coldwell Banker, they included Joe Monaco, managing broker of the Yorktown office, Denise Giordano, associate broker in the same office, and Jennifer Maldonado, licensed mortgage banker.

‘The state of the market nationally is unlike anything we’ve seen in many years,” Monaco acknowledged in his opening segment, “but there are good opportunities at the moment, particularly for buyers.”

For sellers, Monaco said they must price their homes realistically in accordance with conditions in a highly competitive marketplace. “And remember, what you might sacrifice in selling, you can win back when you buy again,” he said.

 For buyers, Monaco advised that there is an unprecedented opportunity to secure a home where all positive factors are in place with mortgage rates still at historic lows at the same time that “prices have come to rest at what many of us believe is the bottom of the decline.” 

“Some homeowners are considering riding out the recessionary market until things improve, and that’s fine if the home isn’t too expensive for them to live in,” he noted. “But, it will probably be a much longer recovery than we’ve experienced in former recessions,” he continued. “If it’s time for them to move on with their lives, then it all boils down to a lifestyle choice.”

For those wanting to sell, Denise Giordano advised that “your home must be marketed as a product to be sold. It must outshine all the others on the block to compete in the marketplace.” Giordano outlined the measures that can be taken to increase curb appeal outside and to properly stage the home on the inside.  “To get the advantage, your home must look like the brilliant diamond of the neighborhood,” she advised.

After a statistical review by Monaco of how the median price of homes in Westchester and Putnam has declined in the past two and a half years, attendees at the seminar, mostly retired citizens, were most interested in knowing more about how short sales work, which may or may not have been revealing that possibility for some of them. One man asked, “What can we expect going forward from here?” 

Monaco responded that the market will probably remain flat, with no real appreciation any time soon, perhaps taking as long as three, five or even seven years to recover. “However, we should experience an increase in unit sales as soon as we see real jobs being created and as the market absorbs the new flux of foreclosures and current inventory,” he concluded.  “We just must expect a slower climb back.”

 Bill Primavera is a licensed Realtor® (PrimaveraHomes.com), affiliated with Coldwell Banker, and a marketing practitioner (PrimaveraPR.com). He can be emailed at This e-mail address is being protected from spambots. You need JavaScript enabled to view it or reached directly at 914-522-2076.

Follow him on Twitter for housing market updates at Twitter.com/HomeGuruNY.