PARAMOUNT MORTGAGE - LENDER'S BLOG

January 8th, 2010 11:53 AM


Some Areas Hot; Others Take a Breather

By Stephanie Armour, USA Today via HouseLogic.com

Home sales have cooled during the winter holiday season but are expected to warm up this spring. Homebuyers will face another deadline to claim a federal tax credit.

 

The National Association of Realtors® (NAR) said Tuesday that its index of pending home sales fell 16% in November from October, breaking a nine-month string of gains. NAR economist Lawrence Yun said that the median house price also fell in October because "many first-time buyers had entered the market. They tended to buy more inexpensive houses, so they dragged down the median price."

 

A couple of factors contributed to the sales drop. People were rushing to take advantage of the first-time homebuyer tax credit which expired at the end of November. Buyers had to get their mortgage applications in by mid-October to ensure that they would be able to have enough time to close by the tax credit cut-off date.

 

Sales got a big lift in October then declined as the deadline approached. When the credit was extended into 2010-and expanded to repeat buyers-buyers took a breather.

 

Another reason is the season. The beginning of December to early January is the slowest slot on the calendar because people are spending their time doing other things: shopping for the holidays, and joining gyms in January to fulfill New Year's resolutions.

 

Buyers must have a contract in place to buy a home by April 30 and close on the home by June 30 to qualify for a tax credit. It's worth up to $8,000 for first-time buyers and $6,500 for repeat buyers.

 

Economists say last year's tax credit pulled sales from early this year, and they predict this year's credit is likely to borrow sales that would have happened late in 2010. However, the national chill in home sales isn't being felt across the country.

 

In Phoenix, broker Tanya Marchiol of Team Investments says there is no sign that sales are slowing down. "We are busier than you can even imagine. We have a lot of people moving here for climate reasons and the technology industry," she says.

 

Distressed sales, including foreclosures, are also drawing buyers' interest. "The investor market is really taking off," she says. "They can get a home for 40 cents on the dollar and sell it for 80 cents on the dollar."

 

It's not just investors in Phoenix who are busy. Real estate investor Wayne Rogers is developing a 500-home subdivision near Crestview, Fla. He is tapping into the first-time home buyer market by building two- and three-bedroom homes priced under $250,000. Those, he says, continue to sell.

 

In Jersey City, sales remain brisk at a former brick pencil factory that was converted into loft-like residences selling in the $200,000s and $300,000s. There has been no slowdown, says Kristin Hurd, sales manager at The Residences at Dixon Mills.

 

"We've had a nice pace, and we're outperforming the market," she says, adding that incentives such as a year of free maintenance help draw in first-time buyers.


Link: Some Areas Hot

Posted by Customer Service on January 8th, 2010 11:53 AMPost a Comment (0)
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