Pending home sales increase 12%
Federal tax incentive program for first-time buyers and existing owners credited by Buffalo Niagara group
Published: November 21, 2009, 12:30 am
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Home sales in the pipeline are up, and an expanded federal tax credit is expected to bolster activity, the Buffalo Niagara Association of Realtors said.
BNAR recorded 628 pending home sales, or deals expected to close in the next couple of months, in October, up 12 percent from October 2008, according to BNAR.
“I think it’s starting to pick up again,” said Michael Johnson, BNAR’s president.
BNAR said statistics for deals that were closed in October were not yet available, due to changes in BNAR’s computer system for recording the data, said John Leonardi, the group’s executive vice president.
The median price, meaning half the homes sold for more than that amount and half sold for less, for closed deals was estimated at $110,000, down 3 percent from a year ago. BNAR estimated the average sale price at $130,778, down 2 percent from October 2008.
Those sale-price figures were based on 793 closed sales, a figure Leonardi said is incomplete. BNAR hopes to have a complete figure soon, he said.
Johnson said the drop in the sale-price figures was probably influenced by sales stimulated by the the federal government’s first-time homebuyer tax credit, with many of the buyers who are taking advantage of it purchasing lower-priced homes.
First-time buyers are eligible for tax credits of up to $8,000. The program was originally scheduled to expire at the end of November, but the government has extended it through the end of April 2010.
“We know the first-time homebuyer credit is working,” Leonardi said.
Along with extending the program, the government introduced a tax credit of up to $6,500 for eligible homebuyers who already own homes, within income restrictions.
The extension and expansion of the tax credits was not announced until early this month, so the impact on monthly sales figures won’t show up until the November results are released in mid-December. But it is not unusual for home sales to slow down somewhat in November, with the onset of the holidays, Johnson said.
The expanded tax credit could appeal to empty nesters and Baby Boomers who want to downsize their living space, he said. “I think it’s going to be a big help to the real estate industry.” And with more spending power, the homeowners’ purchases could lift the region’s average sale price.
James Knight, a former BNAR president, said the supply and demand of homes on the market appears to be steady, reflecting the region’s reputation for stability. “Real estate values are maintaining consistency,” he said.
Knight said he believes potential buyers are also becoming more aware of the extended and expanded tax credits. He noted the National Association of Realtors is using radio ads to promote the program.
The national association previously reported that Buffalo Niagara had the best third-quarter increase in median sale price in the Northeast compared to a year ago. Its 4.8 percent increase, to $119,700, was also eighth highest in the country.
BNAR said the number of homes on the market in Buffalo Niagara in October was 5,095, down 13 percent from last year. New listings were down 4 percent to 1,216, the smallest number for October in seven years.
mglynn@buffnews.com
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