Third quarter 2009 existing home sales figures are in. The National Association of REALTORS® is reporting a rebound in the existing home market. The association credits the recent increase to first-time home buyers hoping to take advantage of an $8,000 federal tax credit targeting them. In fact, gains in the housing market over the last six months appear to be related to the credit, according to an Oct. 23 report released by NAR.
The term, "existing home sales" refers to:
- Single-family homes
- Townhomes
- Condominiums
- Co-ops
Sales increased 9.4 percent to a seasonally adjusted rate of 5.57 million units in September compared to 5.09 million in August. The sales rate is 9.2 percent higher than that of September 2008 when 5.10 million units sold.
"Sales activity is at the highest level in over two years, since it hit 5.73 million in July 2007," according to NAR an association that represents 1.2 million members involved in all aspects of the residential and commercial real estate industries.
The association's chief economist, Lawrence Yun, attributes the sales increase to the Federal Stimulus Package's First-Time Home Buyer Tax Credit of $8,000 made available to a specific socioeconomic group of Americans. Yun said the tax credit is working, but sites a desperate need for the tax credit to be extended. The tax credit is set to expire Nov. 30. All qualifying home sales must be completed by that date in order for home buyers to be eligible for the stimulus windfall. NAR is pushing for the credit to be expanded to more buyers through the middle of 2010 in order to maintain sales momentum and secure the housing industry's recovery.
While there's talk on Capitol Hill of extending the tax credit, fraudulent claims for the first-time home buyer tax credit have some legislators raising eyebrows. In an Oct. 23 Los Angeles Times business article reporter Tiffany Hsu drew attention to the fact that 90,000 ineligible claimants have applied for the credit including one 4-year-old child.
According to Hsu's article, more than 1.4 million claims have been made for the home buyer's credit. Hundreds of thousands more claims are expected when tax returns are filed in 2010. Feds expect to pay about $18 billion in tax credits. There's talk on the hill of creating better checks and balances and more regulations that specify a minimum home buyer age of 18.
In the NAR report, Yun praised the market's improvement, but said it still has a long way to go. "Despite spectacular gains in the stock market, principally from the financial sector recovery, most of the 75 million home owning families have more wealth tied to their homes. Home values could soon turn consistently positive and help the broad base of middle-class families, but we are not there yet," he said. "We're getting early indications of price stabilization, but we need a steady supply of qualified buyers to meaningfully bring inventories down and return us to a period of normal, steady price growth and to fully remove consumer fears, which would then revive the broader economy. Without a firm foundation for middle-class wealth recovery, the post-recession economic growth likely will be one of the weakest in U.S. history."
On Nov. 13, 2009, NAR will release the 2009 National Association of Realtors® Profile of Home Buyers and Sellers. The report is expected to demonstrate that more than 45 percent of homes sold in the last year were purchased by first-time home buyers. A separate practitioner survey shows distressed homes accounted for 29 percent of transactions in September.
Prices are still low and lenders are willing to finance homes for qualified buyers. Contact us today to begin the search for your quality, affordable home.
Troy Batson ~ Broker
Duke Warner Realty
1033 NW Newport Ave
Bend, Oregon 97701
541.678.3725 or 541.382.8262
troybatson@dukewarner.com
troybatson.com
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