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Area home sales up this spring over last
With Friday the deadline to qualify for federal tax credits, local real estate agents are seeing an increase in home sales.
Buyers taking advantage of the incentives have many real estate agents working overtime and posting sales increases compared to last spring, according to a survey of local agencies.
"People are looking today to try to find a house to take advantage of the tax credit by Friday. One of our folks wrapped up a contract at 1:30 a.m. Tuesday morning," said Bill Cole, owner of Realty Executives in Cape Girardeau. "It's made for some weird hours."
Sales of new homes rose 27 percent in March nationwide compared to the previous month's record low, according to the U.S. Commerce Department. Sales of previously owned homes jumped 6.8 percent from February to March, according to the National Association of Realtors.
Cole said his company's sales for the first four months of 2010 are up 35 percent compared to the same period in 2009. March and April brought the company's highest dollar volume sales in its six-and-a-half-year history, Cole said.
Cole's own son, Chris, who recently moved back to Cape Girardeau after graduating from law school, is taking advantage of the first-time homebuyer tax credit.
"I was in a position to buy, but I definitely forced the issue because of the tax credit ending," said Chris Cole, 27, who will close on his new home May 14.
According to Carl Blanchard, a broker at Century 21 Ashland Realty in Cape Girardeau, nearly half of the properties sold in the past few weeks have been to first-time homebuyers, who are eligible for a $8,000 tax credit if they have a signed contract by midnight Friday and close on their loan by June 30.
"Our sales are up 25 percent from last year," Blanchard said, referring to April figures. "An excellent trend as for the past three years they've been down."
The increase in sales, particularly to first-time homebuyers, can be attributed to low interest rates as well as the federal tax credits, he said.
Interest rates are hovering around 5.5 percent, depending on the amount of the loan and the customer's credit score, said Tammie Goodson, vice president at First Missouri State Bank in Cape Girardeau.
"I give a lot of credit to the stimulus because it did help those buyers who were sitting on the fence not knowing if this was a good time," Goodson said.
Another factor contributing to this spring's sales increase is a drop in home prices.
"We're hearing from appraisers that prices are down 15 to 20 percent, so buyers can get more home for their money than they were able to before," Blanchard said. "It's a great time to buy."
Projected closings will be up 84 percent compared to April 2009 at Coldwell Banker Abernathy Realty in Jackson said broker Bill Stovall, "We have seen a rush in the last couple of weeks as buyers try to make the deadline," he said.
First-time homebuyer Blake Kiefner, 23, of Cape Girardeau said he was waiting to buy a home of his own but decided a couple of weeks ago to start looking in hopes of getting the $8,000 tax credit.
"Now I'm trying to rush it so I can get it," he said. "I've been through at least 20 houses and made offers on three. I was outbid on the first one, the second one we couldn't come to an agreement and the third one is still pending."
He plans to use the tax credit to pay his parents back for lending him the money he needs for his down payment.
Once Friday's deadline passes, mortgage lenders will be rushing to process all the loan paperwork before the June 30 closing deadline.
"The crunch is approaching," said Monica Waldon, mortgage originator at Montgomery Bank in Cape Girardeau. "Applications have increased quite a bit over the past couple of weeks. We're working with several Realtors calling over the last few days with a sense of urgency."
Waldon said almost everyone she's talked to in the last three weeks has mentioned the tax credit.
Nearly 1.8 million households have already used the tax credit at a cost of $12.6 billion, according to the Internal Revenue Service.
Local agents are uncertain what will happen to the market after the tax credit deadline passes.
"I would not be surprised if the numbers are way off again because people have just stopped buying," Cole said.
However, Stovall said too many factors influence the housing market to make an accurate prediction.
Thomas Meyer of Exit Realty-Thomas Meyer Associates, said he believes the country is now coming out of recession.
"I've seen some very positive indicators in the last 30 days," Meyer said. "There is a lot of pent-up demand out there."
The Associated Press contributed to this report.
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