Pending sales in the McCall market continue to be way ahead of last year, but there are still questions to be answered to see if the increased activity has any legs. Two trains of thought, one is that the first time home buyer tax credit is the main driver in the bump (local primary occupant’s), and its expiration, the soft job picture, and overall economics will slow the surge, and that we are in a ” mini-bubble “ on our way to a ” double dip “.
Even though we are seeing inventory levels being reduced thru sales absorbtion , there still remains alot of ” shadow inventory “ ( distressed properties still being held by lenders waiting to come onto market ).
Others believe in a long term turnaround saying consumer psychology has become more optimistic with the stock market increases, lots of consumers holding cash , low cost of borrowing , and historically low home prices . The longer term picture is supported by a belief that home prices are at or near the bottom , and they will stay there ” flat ” for the next few years , so as scarce inventory presents itself there’s not alot more ” downside ” price pressure left , and now is a good time to purchase . You could also argue that it may be likely a more tax friendly political environment may be present in the next political cycle.
Having said that , keep in mind that 60% plus of McCall homes are second homes , or investment homes used as vacation rentals , so motives , timing and discretionary decision making are factors driving buyers .
