Where are we going?

Why aren't home prices going up? LOTS of vacant homes is why. Locally, we are probably at bottom, though there may be some concern about the tax credits that are expiring today, which supposedly accounted for about 16% of recent home purchases (that many people surveyed gave the tax credits as their primary reason for buying when they did).

Maybe it would be useful (if there's ANY money left!) to "turn off the faucet" gradually, by offering a SMALLER tax credit for a period of time? This might wean the market off the two tax credit programs ($6500 for people moving up, $8000 for first-time buyers). Don't expect any more tax credit programs to happen, but DO expect lending rates to increase in the second half or last quarter of the year as the Fed is likely to finally raise their rate by then.

When we start to see mortgage rates creeping up, and start hearing a steady stream of news about it, this will probably drive more people to buy than the current time of relaxed rates. If people feel like they have forever, they don't do too much right now.