According to a government report, new home sales jumped 26.9 percent for the month of March. This was the largest advance since April of 1963. This rebound can be attributed to several factors. The tax credit for first time home buyers is about to expire April 30th so there is a rush of Buyers trying to beat the deadline to take advantage of the tax. Another factor is the weather for January and February may have slowed production of new construction. Lastly, Builders have been offering great incentives for Buyers to purchase homes. There will always be an appeal for new construction over resale homes.
So does this show rebound for new construction? Only time will tell if the number of unit built will keep increasing. Key months to watch will be May and June figures to see if the end of the tax credit has any effect of new construction sales. Central Florida and areas surrounding Orlando have seen similar increases in new construction. Resale inventories on resale homes are at a 4 year low and mortgage rates are still very competitive hovering around the 5.25% -5.5% range.
Only time will tell what impact the recent sput in sales really means. One month of increases does not show a trend to recovery but it is a bright spot when looking to find some positive news in an economy trying to recover.

2010 is here so what does the Real Estate outlook for Central Florida look like for the coming year. We can expect pretty much the same as 2009. With all 5 year ARM loans coming due, we can expect a fresh round of foreclosures for the year.  The American Banking Association (ABA) is expecting 1.9 million foreclosures for 2010 slightly up from 2009.

Lawrence Yun, chief economist for the National Association of Realtors expects 2010 to be another favorable year for home buyer as market conditions and tax credits are boosting home sales throughout the country. First time home buyer $8000 tax credit was extended to April 30^th so we can expect the first quarter for the year to be very busy with buyers looking to take advantage of this tax credit.

The vacation home market which was hit the hardest with foreclosures is seeing many bargain hunters and investors looking to take advantage of this segment of the housing market. For Central Florida this is no exception. Vacation homes around the Walt Disney area were hit hard with foreclosures as many owners saw their property values plummet on high price properties that were purchased during the boom years. With values cut almost in half, vacation properties are seeing many international buyers come into the market who had passed on properties during the peak years of home sales.

Overall we can expect a steady stream of foreclosures for 2010 making the year another banner year for home buyers. Tax credits and favorable pricing will drive the sales throughout 2010. While inventory will be steady buyers can also expect competition from investors looking to pick up hot foreclosure properties.

As the November 30^th deadline fastly approaches, lawmakers and the IRS are reviewing the very popular $8000 tax credit for first time home buyers. This tax credit which is first time home buyers allows them to file for the special tax credit on their 2008 or 2009 tax filings. While the program has been extremely popular with buyers there are concerns about the cost of the program as well as fraud by people who do not qualify.

The IRS has identified over 19,000 people who claimed the credit but had not yet purchased a home and 74,000 who had filed for the exemption that had prior home ownership. The IRS is currently reviewing all claims for the exemption and expects to take steps to those who fraudulently made claims.

Congress is currently reviewing the success of the program as well. While viewed as very popular several senators have raised concern about the cost of the program. 1.5 million Families have filed for the tax credit for a cost of $10 billion dollars. There are talks to have the program extended thru June 30, 2010 and make it available to all home buyers.  Whatever is decided there will be measures to watch the cost of the program as well as any fraud that may occur.

Based on the current market conditions congress will address some sort of extension for this program. With midterm elections a year away you can expect many members of congress supporting some kind of bill to keep the housing market going in the right direction.