OK, so the "light at the end of tunnel" was another train.  Like most of America, I am now peeling myself off the tunnel walls to which I was plastered by the on-rushing fast freight of The Financial Crisis (worthy of capital letters, don't you think?).  There is cautious, very cautious, optimism out there.  But before we get too involved in what might be, let's look at what the market in Somerset County did in September.

In a nutshell, September 2008 was not much unlike September 2007, with listings taken (547 vs. 608), and two more sales made (239 vs. 237).  The number of properties available for sale on October 1, was 2402 this year, 2453 in 2007.  There was a 4% drop in average sale prices this September over last, and for the year Somerset County average sale price is $469,730 vs. $498,302, or nearly 6% lower than last year.

The supply/demand ratio was lower in September than in August by just a bit, but the absorption rate climbed to 10.1 months from 9.4 months in August.  However, it was lower than September of 2007, when it was 10.4 months.

The general financial horrors of September probably are not reflected in the sales made numbers.  Consumer confidence is reputed to be crucial to the improvement of the American economy.  The financial rescue plan signed on October 3 should generate an increase in that confidence level, but it will take several months for substantive improvement to work its way through the system.  In the meantime, if you are thinking about buying or selling real estate in Somerset County, New Jersey, be in touch with a Realtor® who is in touch with the market.

By a vote of 72-13 the U.S. Senate passed the housing bill earlier passed by the House of Representatives.  There are a number of provisions in the bill, all of which will help the real estate market in those areas where conditions are the worst.

But even in New Jersey, where the market's decline has not approached the abysmal levels of California, et al., there is a provision that should certainly stimulate activity.  First-time home buyers who close(d) on a home between April 9, 2008 and July 1, 2009, will be eligible for a tax credit of up to $7500.  That's a tax credit, not a deduction.

The difference is that if you have a total tax liability (what you owe the IRS) of, say, $10,000, and you have bought a home in the date range of the bill, your tax liability (what you pay the IRS) can be as little as $2500.  That's huge.

This bill - to be signed by the President next week - will pull buyers off the sidelines, and will strengthen the real estate market significantly.  Other provisions will contribute to this strengthening.  Expect the market to change.

The non-existent "national" real estate market changed today, as the U.S. House of Representatives passed a housing bill, and the President said he would sign it after the Senate passed it, ostensibly in few days.  On May 15 on this blog I wrote about a meeting I was in with Congressman Barney Frank (D - MA) who said that despite statements to the contrary, the President would sign the housing bill when it was passed.  The congressman knows his stuff.

I will write further about this later, but mark this day, July 23, as when the real estate market accelerated its improvement.  There are many aspects to this bill that will revive the market, but the news today is the psychological boost the market needed.

Stay tuned....