As we saw last fall, the tax credit has had an enormous effect on housing sales.  The pending index report below confirms what most already knew, that consumers respond to incentives often in a large way.  So sales in March-April-May-June will be strong, much stronger than the year ago weak first and second quarters.

 
Then what?
 
Sales in November 2009 were up 42.5% over a terribly weak November 2008.  Then the tax credit ended.  December sales were still up 17.1% over December 2008.  Still an improvement but not nearly as strong when the tax credit was available.
 
So come July when the latest version of the tax credit expires we should expect a pull back. The main question is by how much. Interest rates on the ten years went over 4% for the first time since last June today so interest rates are heading higher. Unemployment seems to have peaked and it will be summer time.  So perhaps the fall off won't be as worrisome as it was in the November-December 2009 period.
 
But this is not the time to lose focus.  Hoard cash in advance of what happens next.  Invest only where it will reduce costs or produce higher sales or revenues. Anyone who says they "know" what will happen come July is making it up as they go along.

THINGS GO AWRY DAILY in real estate transactions.  The Schaller’s specialize in fixing those nasty little devils.  57 collective years selling Tahoe Donner homes. http://www.truckeehomefinder.com