A few weeks ago, all I kept hearing was how the number of sales dropped 30% from June to July.... Here's the background, and a prediction of what's to come:

The second round of the federal housing tax credit required a signed contract by April 30, 2010. The closing had to occur by June 30, 2010. Since people rushed to close in order to qualify, there were many more sales in June than July. Put simply: demand shifted to earlier in the year as people shopped early in order to qualify for the tax credit.

Banks and title companies were unable to keep up with the spike in transactions (they were also swamped with refinance applications), so the government extended the closing date until September 30, 2010. What I expect will happen is that there will be more closings than usual in September, followed by a drop in October closings.

To keep this in perspective, note that through the end of August 2010, the total number of sales in Westchester County had actually increased over 2009. Why would people want to buy now? The Wall Street Journal recently came out with "10 Reasons To Buy A Home."

http://online.wsj.com/article/SB10001424052748703376504575492023471133674.html?KEYWORDS=brett+arends

To summarize:
1. You can get a good deal
2. Mortgages are cheap
3. You'll save on taxes
4. It'll be yours
5. You'll get a better home (than if you rented)
6. It offers some inflation protection
7. It's risk capital
8. It's forced savings
9. There is a lot to choose from
10. Sooner or later, the market will clear

That all works well if you are a buyer.... But what if you are a seller?

1. If you sell, where will you move to? This is a great time to be a "move-up" buyer, i.e., to purchase a more expensive property.
2. Mortgage rates are near all time lows; since most buyers need financing, this is a great time to sell because a lower interest rate means that more buyers can afford to purchase your home. Once rates start to rise - AND THEY WILL! - that might not necessarily be a good thing for prices and it will decrease buyers' purchasing power.