Nearly 68,000 existing homes were sold in the Washington area during the first nine months of 2011. That’s a 16 percent increase over the same period in 2010 and means that this has been the best year since 2006.
It also has been an interesting year to watch unfold, as it is, in a sense, the first “normal” real estate year since 2008.
By normal, I mean this year’s buyers were not influenced to purchase a home by the incentive of receiving $6,500 to $8,000 in tax credits from the U.S. government.
(I know, I know. I promised to stop talking about the tax credits. But they really affect how we understand market statistics. Stick with me.)
I thought of the tax credits this week when I looked at the fever charts showing four years of monthly home sales. Looking at the 2011 line, we see the typical pattern of sales in the Washington area. Things are busiest in March, April and May, and then sales taper off slowly during the last seven months of the year.
For most months this year, sales have been higher than in the previous three years. April 2010 is one exception because that was the last month tax credits were available for home purchases. The impending deadline prompted buyers to act in large numbers, pushing sales activity to extraordinary heights. April 2011 just couldn’t compete.
You also will notice that 2011 sales slipped below the pace of 2009 sales during the past few months. That also can be explained by the tax credits.
The original tax credit was set to expire in November 2009. That’s why the 2009 line on the chart doesn’t dip steadily downward in the fall as is seen in 2009 and 2011. The normal sales pattern for 2009 was disrupted by the urgency buyers felt that autumn.
Now that the tax credits are long gone, normal sales patterns have returned. And that’s why sales in the past four months don’t look so great when compared to 2009.
Still, when you compare this year to the previous two (when tax credits were available) it’s rather remarkable that we’ve done so well without the credits.
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