Unemployment was down today, which is good news, but so were existing home sales, which is not so good news for the real estate market. It was forecast by economists and other “experts” that sales would be up slightly from last month. They were down slightly instead. I emphasize slightly. Much ado about nothing in my opinion.

The thing is, we have to expect some drop in home sales as the first time buyer tax credit nears its end. The end being December 1st. There is still time for consumers to get in on the credit, but time is slipping away quickly. It is taking on average anywhere from 45 to 60 days to take a home purchase from contract to closing, and that’s if it goes relatively smoothly. So, as I said, time is running out and buyers realize it may be to late.

There are all sorts of bills running around Congress to extend the tax credit. That would be a good thing for the real estate industry and possibly even the economy. Lots of lobbyists are working overtime doing their part to make it happen. The National Association of Realtors (NAR) is also at the party with a big push for an extension. You can find articles all over the internet about efforts to do so.

Some want to give everyone that buys a house a tax credit while others just want to extend the first time buyers opportunity.

If they do nothing and let it run out home sales are liable to drop drastically as that is what has been churning the market this past year. Better if they would not have done anything to begin with than let it go away.

Let me explain. We have taken all the first time homebuyers of this year and two or three years into the future and forced them into the market early. That’s why the market has been so busy lately. By taking all these sales now that leaves none for the near future. If the incentives are not there, there will be no more buyers. The economy, although improving in the Feds opinion, is not on its feet enough yet to support a robust housing market of its own volition.

In other words, by forcing the market we have used up all the buyers. I’m also sure that a lot of people have gotten into the real estate business as Realtors specifically to take advantage of all the extra buyers out there. That’s going to leave us with no buyers and a lot of extra agents. This is just my theory.

Without an extension of the first time buyer tax credit, the housing market could just possibly be doomed. I’m hoping they have a plan. A plan that would let business slow down, thinking the credit was over, and then around the middle of November or so pass the bill. That would create a whole new rush of buyers wanting to get in while the getting was good. That would be a good thing. Just maybe enough momentum to carry us through to the end of this recession.