It's evident that the homebuyer tax credit gave a much-needed boost to the housing market. What's unclear is how much of this heightened volume will be sustained.[IMAGE]
Due to the extension of the closing deadline for this ever-popular government incentive, only time will tell the answer to this question. Regardless, the housing market continued to ""hold its own"" in June, as both home sales and prices increased over year-ago levels, RE/MAX recently reported.
According to the results of a monthly survey of 54 metropolitan areas, closed transactions in June 2010 were 5.6 percent higher than June 2009, and home prices were 3.5 percent higher than the same month one year ago.
""There's no question, the tax credit has had a significant impact on this market,"" said Margaret Kelly, CEO of Denver-based RE/MAX. ""No one can predict the future, and we may still see a slight pull back, but for right now it appears that housing is holding its own, hopefully on the road to a sustainable recovery.""
RE/MAX said buyers trying to make the original closing deadline for the tax credit may have pushed sales higher for June, as closed transactions jumped 7.2 percent from the previous month and were 5.6 percent higher than last year. Of the 54 metro areas tracked, exactly half Ã¢â‚¬" 27 Ã¢â‚¬"[COLUMN_BREAK]
had increases in closed transactions on a year-over-year basis. The remaining 27 areas posted declines in transactions.
According to RE/MAX, home sales were especially strong in areas throughout the Northeast. Sales in Philadelphia were 27 percent higher than year-ago levels, and Boston and Hartford both saw 23 percent more sales than last year. In addition, sales in Providence soared by 21 percent from one year to the next.
On another positive note, RE/MAX said home prices appear to be stabilizing and slowly inching higher. In the survey's 54 metro areas, the median sales price in June jumped 3.5 percent from last year, coming in at a weighted average of $211,530. Prices in 27 metro areas were on the rise, while 25 areas posted lower prices and two areas showed no change in prices.
Metro areas in California experienced the most dramatic price increases. The survey found that the median price in San Francisco soared 18 percent from June 2009 levels, Los Angeles prices were 10 percent higher, and San Francisco prices came in 9 percent above levels seen one year ago.
RE/MAX also reported encouraging results in regard to the average days on market. For homes that sold in the survey's 54 metro areas in June, the average number of days it took from listing to signed contract was 81, slightly lower than 83 days in May and the 89-day average of one year ago.
Additionally, RE/MAX found that the inventory of homes on the market in June inched up 1.2 percent from May but was down 5.8 percent from June 2009. In the survey's 54 metro areas, the average months supply of inventory in June was 8.5 months, unchanged from May. This means that at the current rate of sales, the average metro would eliminate its inventory of homes for sale in eight and a half months. According to RE/MAX, a six-month supply is considered a market balanced equally between buyers and sellers.