Sikeston area businesses credit tax break for real estate sales boost

SIKESTON, Mo. -- Although President Barack Obama signed a bill Friday to extend the popular $8,000 tax credit for first-time homebuyers, originally set to expire at the end of November, those involved in closing home loans are still expecting the rest of the month to be hectic.

"When comparing this November to the last two years, we will double the amount of home loans this month from a typical year," said Samantha Jarrett, vice president at First Midwest Bank in Sikeston. "It's huge, especially when you consider that November and December are typically two of the slowest months."

But banks aren't the only ones benefiting from the increase in home sales, to which many say the up to $8,000 tax credit has contributed. Real estate agents, appraisers, inspectors, title insurance companies and more are involved in getting the properties closed -- and the boost in home sales is credited with keeping some businesses afloat during the tough economic times.

"I think it's been a very positive thing for this area," said Chuck Leible, owner of Delta Title in Sikeston. He's seen business pick up in the past 10 months.

Mike Jobe, an inspector with Jobe Construction Company, noted he was "really really busy" in the spring, then business slowed in July through September, only to pick up again.

"And I really think it's because of the Nov. 30 deadline," he said. "Most of the houses that I've inspected and see selling are for first-time homebuyers and are selling for under $100,000."

The tax credit, which is for 10 percent of the selling price up to $8,000, isn't the only thing encouraging people to buy, noted Jobe. "Interest rates are extremely cheap, too," he said.

All that makes for "a very pleasant gravy to be thrown in," said Leible.

Julie Redden, an appraiser, said she's been quite busy over the past few weeks and expects it to continue through the end of the month. She said she's seen about a 50 percent increase in business -- and while there are some refinancing, most of those are for first-time homebuyers.

"About a week ago, I got swamped within a couple of days," she said. "And of course, everyone wants to close by Nov. 30."

Tracey Sutton, manager at SEMO Title said the need to get paperwork done in time for a Nov. 30 closing has been expressed several times. "And we're going to make sure that our customers are taken care of -- we're hoping not to turn anyone down," she said.

Despite everything, Sutton said business has not yet been too overwhelming -- but employees are preparing to work extra hours if necessary. "Typically, we don't work the day after Thanksgiving, but if the need is there, we are going to work," she said.

Karen Bizzell, manager at Old Security Title, said business has increased there and she expects it to continue. "I'm sure the last two weeks of November will be very busy," she said. Despite the extension, several people who planned to buy likely need to be in their new home by the end of the month, she noted.

Faye Walborg, broker/owner of Century 21 Premiere Realty in Sikeston and one of the founding members of the SemoList Web site, said business has been brisk for most agents, and there appears to be a lot of first-time homebuyers on the market.

"I'd say about 60 percent of the properties closed last month and so far this month are for people who are looking to get a refund back," she said. "Although there aren't any statistics, I'd say (the tax credit) is daring first-time homebuyers to make a move."

Thanks to a part of the bill signed Friday, some current homeowners will get incentives when they buy a new home. The program includes a $6,500 credit for existing homeowners who buy a new place after living in their current residence for at least five years.

"I think that's going to be a great opportunity and will hopefully spur the market and keep it active," said Walborg.

She and several others noted that although business has increased when compared to 2008 and early 2009 numbers, it's not a big jump from other years. But the tax credit has helped to keep the housing market moving.

"I think that if you extracted the closings that have been done due to the first-time homebuyer tax credit, the market would be very slim," said Walborg.

In processing loans, Jarrett agreed the tax credit was the push many people who were on the fence about purchasing a home needed. "We've been hearing it all year," she said. "And (before the extension) they said that if they couldn't close it by Nov. 30, they are going to wait."

With the extension, all involved said they expect that the boost will continue, especially for people who needed more time to find the perfect home or get their finances in order before it expires in June.

"We're hoping it will really increase sales for the winter, which is usually our slowest time," said Sutton. "And now that the deadlines have been extended, I think it will be easier."