Housing:  Life after the Tax Credit.  What's next?

Airtime: Fri. Apr. 30 2010 | 3:14 PM ET Outlook and insights on what's next for housing when the clock strikes midnight and the tax credit expires, with Mark Zandi, Moody's Economy.com; Thomas Lawler, Lawler Economic/Housing Consulting and CNBC's Diana Olick.

Commentary:

Excellent commentary on the key issues facing housing on the national basis.  As it pointed out in this video, the housing market will likely be 'below trend' for several months following the expiration date for the credit (April 30, 2010).  Buyer's were clearly brought forward based on our Saint Louis Real Estate market statistics - pending sales numbers are more than 50% above same level this time last year (4/2009). 

We agree that the St Louis real estate housing market will not experience a double dip in pricing - the market has clearly stabilized over the past 12 months.  This is especially true given that the local Saint Louis real estate market is not facing significant headwinds from distressed property sales - with local St Louis Short Sales and Saint Louis foreclosure sales accounting for less than 10% of overall inventory and sales.

We are only up about 10% in housing inventory when compared to last years inventory at this time.  We expect the trend for housing will soften and this will show up as a gap between the current year/year housing inventory increase (with it increasing over the next two to three months) and the year/year pending gap (up more than 50% currently year/year) will compress with a subjective feeling of a slowing in activity.  See the latest Saint Louis Real Estate Total Housing Market Overview Report for more details and specific numbers.

Clearly the local Saint Louis housing market could not maintain the fevent sales activity (especially below $200K) that was witnessed over the past 45 days as buyers scrambled to meet the April 30th deadline for the tax credit.  What the market truly needs to recover is exactly what Zandi outlines - consistent and strong job growth.  We agree that should that occur with the resulting unemployment rate for the market declining over the next 12 months - we could see a much stronger spring in 2011.