Merry Xmas Jetty readers. I just read a good article that breaks down first home buyer psychology in dealing with the $8,000 tax credit and how it has skewed new home sales numbers. As the first November deadline approached, many first buyers were weary of going under contract with a new construction because of the risk it wasn’t going to be completed on time. This effect has moved more existing homes off the market rather than new homes.
The census Bureau’s weak new home sales number are in conflict with all the other positive housing data:
“New home sales are different than home resales. When a contract is written on a newly-built home, the Census Bureau says just 25% are “move-in ready” at the time of contract. The original expiration of the first time home buyer tax credit was November 30th and that wasn’t extended until November 5. A buyer using the first time home buyer credit would have effectively been risking the $8,000 against the developer’s completion of the property on time.”
The Chicago Jetty Blog 
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