May numbers are in and the takeaway....tax credits get buyers a movin'.
As many of you know, the government's $8,000 tax credit was for deals under contract by the end of April 2010. So what happened to May 2010's numbers?
Some relevant highlights for May 2010:
- Pending sales were down 40% versus May 2009.
- Closed sales were up 40% versus May 2009.
- Median prices were down slightly, off by 6% versus May 2009.
Should we be crying our eyes out? Probably not. That tax credit potentially stimulated a bunch of activity that may not have even happened later in the year.
Even if all it did was pull sales in earlier, most condo buyers are not nearly as frightened of the market as they were a year ago. It's very possible some of that cautious optimism will persist even in the tax-credit free world (so long as prices and some baseline of activity hold up).
As a recap, closed sales versus the previous year have been up every month in 2010. March, April, and May beat their 2009 numbers by 50%, 80%, and 40%, respectively. For those who were watching the condo trends in 2009, closed sales in April 2009 were 50% lower than the previous year so we've made a ton of progress in the past year.
It will be interesting to see if that tax credit momentum comes back organically or if all of that accelerated activity in the last 6 months takes the next 6 months to smooth out.