The California Association of Realtors® released their March report of home sales in California. Statewide, the median price for all homes (single family + condos & townhomes) has increased 20% and the volume has increased 2.5% since March 2009. In Orange County, the median price increased 12.7% and now stands at $434,000.
There is no doubt that the government programs, supporting extremely low mortgage rates and the first-time-buyer tax credit have helped the real estate market improve so dramatically from last year, but the question now is whether this “recovery” can be sustained.
At the 15th annual real estate conference hosted by the University of California, Berkeley’s Fisher Center for Real Estate, the chairman and keynote speaker, economist Ken Rosen stated that there’s been “a very big bounce off the bottom,” and warned that if the Fed doesn’t raise the discount rate soon, they will have to “play catch-up” with bigger rate increases later to control inflation.
This is now the final week that buyers will have to finalize a contract on a home purchase that will qualify them to receive the $8,000 first time buyer tax credit. There may still be a little bit of fudging on the April 30th date by those who want to take a chance on an IRS audit, but the frenzy should pretty much be over by the end of next week.
The big question today is “If this is really the real estate recovery, what will the numbers show for May when the tax credit will no longer count as an incentive?” We should expect to get those numbers in late June.