The first time home buyer tax credit seems to have contributed to an early spring market and the increase in sales leading up to the April 30th deadline. Now that the deadline has pasted, many analysts and consumers are starting to ask "what can we expect next?"

It appears the real estate market has reached a period of stabilization for the middle to upper level priced homes in the Lake Hodges area. While showing activity has slightly slowed following weeks of spring break, buyers are still out there looking for the "perfect property". Since there is a shortage of nice inventory ( which means properties that are not short sales or foreclosures), homes that are priced properly are continuing to sell quickly.

It's also important to note that buyers are taking their time and they are in no hurry to purchase. There is no longer an urgency to be under contract in order to qualify the tax credit deadline. The California State Homebuyer Tax Credit is still available, but the funds are dwindling and it's possible that these funds could be absorbed earlier than expected. For the time being, it appears the market has stabilized, but for how long these conditions will persist remains to be seen.

The entry level market is a whole different ballgame. Median home sales have been up for homes approximately under $500,000, but it's important to keep in mind that the media is casting a blanket over a vast real estate market with many moving parts.

The following article from the San Diego Union Tribune paints an interesting perspective as it references market trends from over the past few months. As realtors in the North County San Diego market trenches, we are experiencing the day to day real estate market changes. We also receive insight and market projections from industry experts, company management, mortgage consultants, analysts and consumers. Although the following article is referring to older data and statistics, it will be interesting to see the upcoming data for April and May in the months to come.

Resale Home Prices Rise in County

Median climbs 14.7% to $379,000

By Roger Showley, UNION-TRIBUNE STAFF WRITER

Originally published May 11, 2010 at 2:01 p.m., updated May 11, 2010 at 8:26 p.m.

Federal tax credits that expired at the end of April helped to pump up home sales this spring. (AP photo)

SAN DIEGO - San Diego County resale house prices rose 14.7 percent in the first quarter to a median $379,000, the National Association of Realtors reported Tuesday, making the county one of 91 metro areas showing a year-over-year increase.

The numbers placed San Diego in 16th place in appreciation and seventh in price level out of 152 metro areas covered.

Home prices rose in nearly 60 percent of U.S. cities in the first quarter of this year, as the housing market started to stabilize as a result of billions of dollars in federal spending. The national median of $166,100 was down 0.7 percent from the fourth quarter of 2009, a reflection of a general flattening of prices nationally. San Diego was off $200.

Federal tax credits - $8,000 for new buyers and $6,500 for current owners - helped gin up home sales this spring as many buyers raced to purchase a home in time to qualify before the incentives expired at the end of April.

"The (federal homebuyer) tax credit has been very effective in drawing down excess inventory, with about 1 million additional sales resulting directly from the stimulus," said Lawrence Yun, the association's chief economist.

Although San Diego prices rose, they remain far below the peak set in 2005, and some analysts say the increase reflects a change in market mix - more high-priced homes selling than in previous quarters - than a major increase in value. Earlier this week, Zillow.com placed San Diego's values up nearly 4 percent in March, compared with March 2009.

Sales nationally ran at a seasonally adjusted annual rate of 5.14 million in the quarter, down 14 percent from the tax-rebate-induced surge of 5.97 million in the fourth quarter. But the count was 11.4 percent above year-ago levels.

San Diego-based MDA DataQuick had reported first-quarter sales in the county at 8,014, down 23 percent from the fourth quarter and 0.8 percent higher than in the first quarter of 2009.

DataQuick's median price for San Diego for the quarter, based on official data rather than real estate agent reports, was $360,000 for single-family resale houses, up 14.3 percent from year-ago levels.

Saginaw, Mich., about 100 miles north of Detroit, posted the highest increase over the year, up 100.7 percent. Yun called that "not very meaningful," because the first quarter of 2009 saw very high levels of foreclosure sales at highly discounted prices in Midwest metros.

With the federal housing tax credits now over, many experts anticipate home sales will soften in the near term, and that could siphon some momentum in home price increases.

Prices also could be hurt as banks unload their backlogs of foreclosed homes. And despite rising prices, nearly one-quarter of all U.S. homeowners with a mortgage still owe more on their loans than their homes are worth, according to CoreLogic.

That's why many housing experts project home prices will remain almost flat for the next two years, according to a survey of leading economists by The Associated Press last month.

The Realtors association is projecting prices will increase "very modestly" in the second half of this year, assuming unemployment and the economy don't take a turn for the worse, Molony said.

The Associated Press contributed to this report.

-Roger Showley

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