The Albuquerque resale market for single family homes bucked the national trend in May with even more closings than occurred in April, but the number of pending sales suggest that buying momentum may be waning.
Pending sales, which are a strong predictor for the number of closings expected in the next 30-60 days, were down 47% in May compared to April and down 21% compared with the same time last year. This is after skyrocketing 50% over last year at the peak of the spring federal tax incentive for home buyers.
I believe were seeing the effect of the tax incentive ending, and that drop-off is not unexpected. This comes from the Greater Albuquerque Association of Realtors. It's a great time to end the tax credit because were going into what is traditionally a busy (sales) period. You will see a lull, but I think that you don't want to be relying on incentives.
To receive a tax credit of up to $8,000, buyers must have signed contracts by the end of April, and as of now, closed those deals by the end of this month. However, the senate recently approved an extension of the closing deadline to Sept. 30. Whether that becomes law is now up to the house and the president.
The credit did not have any effect on the local home sale prices. The median sales price held strong at $175K March through May and has not come out of the $170's by more than $50 in the last nine months. Even the average home sale has hovered around $210,000 over the same time span. The time it took to sell a home improved last month from 74 days in April to 66 days.
Even with the economy being in it's current situation, people are still looking for that right home for them and their families. We have a ways to go, but it looks promising.