Tax Credit Ends. Sales Plunge. What a Surprise.

I can hear the conversation now.

Barack: Larry, we need to do something now get some homes sold. Maybe some kind of tax deal on the down payment.

Larry: But Barack, remember that any short-term deal that gets people who would buy anyway to buy faster has a zero net effect.

Barack: People are unhappy. Our government dedicated to making them happy.

Larry: Well, OK. How about we rebate $8,000 of the down payment for first-time buyers. Just remember that Edmunds.com says that the “Cash for Clunkers cost taxpayers $24,000 per vehicle sold.”

Barack: No big deal. Let it be written. After all, who was it that said, “’Deficits don’t matter.’ Dick Cheney?”

So it came to pass in metro Albuquerque. Closed sales increased from 380 in February to 634 in March. The first-time buyer rebate ended April 30. With 731 sales closed during the month, May showed the highest sales-closed figure of 2010 to date. Sales dropped slightly in June. Then sales plunged. The peak summer selling season closed at the end of August with the number of monthly sales closed remaining above 500 for single family detached homes during July and August. The sale of 511 homes closed during August. That was a 15% drop from August 2009.

Sales may remain at the 500-level for a month or two until its gets cold enough to discourage people from driving around looking at homes.

That’s because pending sales during one month are an indicator of the number of closed sales during the next month or so.

The number of pending sales of single family detached homes was 768 during August, the high for the year. Pending sales have now shown three consecutive months of growth. Pending sales were 678 during May.

Or sales may not remain around 500. Today’s Wall Street Journal headline says it. “Bank’s Plans for Foreclosed Homes Will Drive Market.” While Arizona has far, far more foreclosed homes that Albuquerque, including some that banks haven’t gotten around to foreclosing for years after the owner walked, Albuquerque has its share, as any reader of the Journal’s legal ads knows.

The median sales price for single-family detached homes remained above $180,000 during the three summer months. The peak median sales price for the year, so far, was $186,000 during July. The median sales price was $182,500 was $182,500 during August.

The highest average sales price of 2010 has been the $230,213 achieved during July. For August, the average sales price was $221,379, which was 4.4% above August 2009.

Metro Albuquerque had 5,759 listed for sale during August, down slightly from July. Since March, the monthly listing inventory has been above 5,000.