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The home buyer tax credit has ended, along with all the hype. Now what?

Experts have been wary of the end of the home buyer tax credit for months, fearing impending doom in the housing market. The theory is that the tax credit opportunity pushed many potential buyers in the market sooner, causing a cram-like effect where everyone rushed to be under contract by April 30th. Once the rush is over, what happens to the housing market? A significant slowdown, perhaps even slower than it might have been if the tax credit never existed.

We might not see the effects of the potential slowdown for several months, as many buyers have yet to close on their purchase (under the tax credit requirements, closing must take place by June 30th).

There are some positive effects that have come out of this, of course. The tax credit provided benefits to many Idaho home buyers, especially Idaho first-time home buyers, by offering an influx of cash that could be used to make improvements. The benefits to the Idaho real estate market were tremendous, boosting the overall economy in a domino effect. Now that the tax credit has ended, we're not seeing the huge surplus of housing inventory sitting stagnant, so competition isn't as stiff for sellers. The tax credit certainly helped move a lot of inventory.

But what's going to happen to average sale prices? Will they decline with a decreased demand? And what about average time on market? Are we going to see those numbers start to creep up again? What about Idaho mortgage rates - can we expect to see the low numbers we have been, or will the boost in closings over the next month or so force rates upward? The economy is showing signs of slow yet steady improvement, but a major flop in the housing market could do some real damage to an already sensitive situation. Only time will tell.