Tax credits push home sales higher
One month doesn't make for a complete turnaround in the housing sector, but good news is welcome in today's economy.
A comparison of existing home sales from this past April over April 2009 shows transactions went through the roof.
Figures from the Prescott-Area Association of Realtors reveal that home sales rose more than 90 percent from April 2009 to April 2010.
Association numbers show Realtors sold 128 existing homes in April 2009 and 244 this past April, making for a 91 percent increase.
Realtor Paula A. Smith, president of the association, estimates eight of her clients took advantage of the tax credits that expired at the end of the month.
Prospective buyers had to sign contracts no later than April 30 to benefit from the $8,000 first-time buyer or the $6.500 repeat homebuyer credits. Buyers have to complete their purchase by the end of June to qualify for the credits.
While the association did not keep tabs on buyers making a late purchase for a tax credit, Smith attributes some of the spike to it.
"I had a lot of clients that probably hurried to make their decisions, because of the tax credit, who were going to buy anyway," she said. "The tax credit helped them make the decision a little bit faster."
As of Wednesday, the tri-city area had 2,383 active residential listings, and 551 of those are distressed properties, according to Smith.
The April upswing went national, too.
The National Association of Realtors reported earlier this week that buyers ran to close contracts before the tax credit expired, pushing April sales to a five-month high.
The national association reported sales of existing homes, including single-family, town homes, condos and co-ops, rose 7.6 percent month over month to an annual rate of 5.77 million units.
The April 2010 sales figures are 22.8 percent higher than the 4.70 million-unit pace in April 2009 and monthly sales rose 7 percent in March.
Lawrence Yun, chief NAR economist, said an increase was predictable because of the tax credit, and he expects sales to fall in the coming months with the credit option gone.
Buyers are coming back to the market with more confidence because of stabilizing home prices, an improving economy and interest rates that are historically low, according to Yun.
Vicki Cox Golder, owner of Vicki L. Cox & Associates in Tucson, said in the NAR press release that many buyers remain in the market even without the tax credit.
"Some Realtors tell us they are very busy with clients who are entering the market now as a result of improved conditions, while others are welcoming a slowdown from frantic market conditions in recent months," she said.
Walter Molony, senior public affairs specialist for NAR, said Thursday morning the outlook for the rest of the year is positive.
Molony believes renters will enter the market as jobs improve and the job market will continue to improve this year and into 2011.
"We think that the market is likely to become self-sustaining later in the year," he said. "We think the tax credit really did its job in stabilizing the market."