So it’s been a few weeks since the buyer credit expired on April 30th. How’s the market doing now?
Crickets. Can you hear them?
This graph shows the number of contracts written for residential properties in Hartford County. Data is grouped by week and comes from the Connecticut Multiple Listing Service, which is deemed reliable but not guaranteed. 2004 was selected as the comparison year for three reasons:
1. The days/dates match up with 2010
2. The market was very active
3. There was no outside influence from a tax credit
The number of contracts written in 2010 trailed the number written in 2004 from the beginning of the year until early April. Buyers racing to capture the credit caused a spike in the number of contracts written at the end of April, pushing 2010 above 2004. But now that we’re in May the activity level has decreased precipitously.
The data shows that local real estate markets have not fully recovered. Even with the tax credit encouraging buyers to act, sales this year were below the levels of 2004 for most of the individual weeks and for the total period. The sharp drop-off in the number of contracts immediately following the credit expiration shows that the credit did play an important role. However, that role may have been to simply shift sales forward rather than generate additional sales.
What will happen next? Will the past couple of weeks end up being an unusually low dip, sort of like the last week in April was an unusually high spike? Only time will tell…