Home sales up in Cape Girardeau, Midwest

Home sales in Cape Girardeau surged in November along with the rest of the nation, including a 58 percent jump in the Midwest over year-ago levels, as first-time buyers rushed to claim a temporary federal tax credit.

The Midwest reported the biggest increase in sales during the month, with 106,000 completed sales in the 11-state region, the National Association of Realtors said Tuesday. The median home price was flat at $140,800.

Nationally, existing home sales jumped almost 47 percent from November of last year, without adjusting for seasonal factors. The median sales price fell 4 percent to $172,600.

An increase didn't surprise Paul Kitchen of Prudential Bridgeport Realty, the president of the Cape Girardeau Board of Realtors.

"I am surprised it was that much," he said. "We never saw the big downturn here the rest of the country did, but we don't expect to see the big upturn, either."

After a lean year, however, the added sales fueled by a tax credit of up to $8,000 for first-time home buyers were welcome, Kitchen said.

The tax credit was initially set to expire Nov. 30, but has since been extended by Congress.

"A lot of agents really have taken advantage of this to work with clients and do all they can to get them in under the wire," Kitchen said.

About half of all buyers in November were first-time home buyers, the realtors association said. The credit, which has been expanded to buyers who have owned their current homes for at least five years, is now set to expire in April. Repeat buyers are eligible for a tax credit of up to $6,500, while first-time home buyers -- or anyone who hasn't owned a home in the last three years -- can still get up to $8,000.

"Buyers will be coming out of the woodwork after the first of the year," Kitchen predicted.

The Missouri Housing Development Commission has been offering low-cost loans for buyers eligible for the tax credit to help with down payments. This week, the commission also voted to provide first-year tax payments to the new buyers, up to $1,500.

"That is very attractive," Kitchen said. "It just goes to show how the government sees the importance of real estate in the economy."

In some areas, economic problems outweighed the tax credit's benefit.

"Our problem is the unemployment," said real estate agent Ken Gentile with Re/Max Home Sales Service in Detroit.

All 12 major Midwestern cities tracked in the Associated Press-Re/Max Monthly Housing Report, also released Tuesday, showed double-digit annual sales increases. The sales gains ranged from a 19 percent jump in Detroit to a 94 percent increase in Omaha, Neb.

Seven of the cities reported median sale price gains over November last year, including increases of roughly 30 percent in Cleveland and Detroit.

The report analyzed sales transactions in the metropolitan statistical areas recorded by all real estate agents, regardless of company affiliation.

Southeast Missourian writer Rudi Keller contributed to this report.