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Bill Freehling is a business writer for The Free Lance-Star and Fredericksburg.com. This blog is on Fredericksburg-area business. Send an e-mail to Bill Freehling.

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Why local housing sales dipped but prices rose

I just came across an interesting article on CNBC.com that likely explains a seemingly incongruent fact from the Fredericksburg-area July housing data — in which median prices rose about 5 percent from the year before but sales fell 16 percent. The $8,000 federal tax credit for first-time homebuyers expired at the end of June, so none of the July buyers got the credit. As CNBC explains, that means July buyers were less likely to be first-timers, and hence were more likely to pay a bit higher prices. That may explain how sales could fall but median prices could rise for the homes that did sell.

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Permalink: http://news.fredericksburg.com/businessbrowser/2010/08/24/why-local-housing-sales-dipped-but-prices-rose/

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  • LarryG

    huh? why would people pay higher prices if it is a buyer’s market?

    More than likely what happened – and I admit to being a cynic… but some first time buyers got sold on higher priced housing – pushed that way by the stimulus – but their closings got delayed and guess who benefited? Not the home-buyer.

    The mortgage business is predatory and is all about extracting from the buyer as much as possible in “fees” and first time buyers are ripe for the picking.

  • Bill Freehling

    Because the people who were in the market in July, unlike first-time buyers, were not necessarily looking for a starter home. So more mid- and higher-priced homes sold. I’m going to crunch the numbers and see if they confirm this theory.

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