As I said in the column, Zillow’s Home Value Index suggests that Savannah metro area prices declined an additional 15 percent after the final expiration of the homebuyer tax credit in summer 2010.
If we had simply allowed prices to crash a little faster and sooner, we could have started the housing recovery a year or more ago.
New home sales ticked up today, but you can see on the great graph here by Calculated Risk that sales also ticked up back at the end of 2009 and in spring of 2010 — just before the twin expiration dates of the homebuyer tax credit. And when I say “ticked up”, that’s what I mean: the policy was completely inadequate given the massive scale of the decline in new home sales.
Look also at the tendency of new home sales, which obviously fuel new construction, to guide the economy out of recession. Of course, there was no way that was going to happen this time around because of massive overbuilding earlier in the last decade.
As you look at the graph, consider also that the U.S. population has increased dramatically since the early 1980s, the last time demand for new homes was so low.