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Tuesday, June 8, 2010

Want to Sell Your House?

The Wall Street Journal is reporting that the withdrawal of federal tax credits for home buyers led to a steeper-than-expected plunge in May home sales in much of the U.S., as the housing market struggles to wean itself from government support.

Economists and real estate analysts expected home sales to slow after the tax credit, of as much as $8,000, expired at the end of April. But early data from real estate brokers indicate that the sales decline has been far more substantial than expected, with some markets showing declines of 25% to 30%.

"Anybody who wanted to buy a house probably did" before the tax credit expired.  That is something I have written about in the past, my concern that the government is artificially supporting home sales and prices.  The problem with such schemes is they rarely work and when the scheme is over the consequences are usually worse.

US house sales have not so much declined since the tax-bribery ended, as plunged.  Anyone who had the slightest inclination to buy a house did so in the last few months. That doesn't leave many customers for the rest of the year.

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