Pending homes sales are those transactions that have been signed, but not closed, and in February they increased by the highest rate since February 2001. One of the main drivers behind this nationwide trend is the rush of first homeowners taking advantage of the first time homebuyer tax credit before it expires. The Las Vegas housing market has also seen a boost from the government scheme.
The ‘Worker, Homeownership, and Business Assistance Act of 2009′ gives a tax credit of up to $8,000 for qualified first-time home buyers purchasing a principal residence. The tax credit applies to sales occurring on or after January 1, 2009 and on or before April 30, 2010. However, in cases where a binding sales contract is signed by April 30, 2010, a home purchase completed by June 30, 2010 will qualify.
This stimulus saw pending sales increase 8.2% in February, which meant sales are 17.3% higher than the same month a year ago. Once the tax credit expires the true health of the housing market will be exposed. In Las Vegas the sheer volume of foreclosures, with 76% of Las Vegas homeowners upside down on their mortgages, means that the inventory still has some way to go before the supply curve puts any pressure on prices. Unless the stimulus is extended again the Las Vegas housing market may dip further.
