Posted on April - 25 - 2010
Countdown to tax credit deadline spurs homebuying activity
Reflecting on his busiest spring showing and selling homes in three years, longtime Progressive Urban Real Estate agent Jim Anderson of Cleveland mentions he and co-worker Michelle Anderson — no relation — vowed last week not to sleep until next month.
They have a lot of company as the April 30 deadline looms for homebuyers to have a property under contract if they want to receive the federal government’s $8,000 first-time homebuyer tax credit or the $6,500 credit for move-up homebuyers. Tick-tock marketing abounds among builders and brokers. A digital clock on the Howard Hanna Real Estate Services web site tracking the seconds left to the deadline epitomizes the situation.
However, Mr. Anderson notes he and others in the residential business are skipping sleep because they want to seize advantage of the bounce the credit gave the market. He and others worry the market will return to its longtime snooze after the deadline passes, once more overcome by high joblessness, insecurity and worry over declining home values.
One thing is clear: the long-declining market rallied from Jan. 1 through March 31 in a way it has not in years.
Statistics from the Northern Ohio Regional Multiple Listing Service show single-family and condominium sales for the year through March 31 climbed 7%, to 6,762 sold listings from 6,309 a year ago. Likewise, dollar volume for listing sales in that period soared 31% to $750 million from $572 million in 2009.
Some of the uptick clearly is due to the tax credits. Mr. Anderson notes his business is a mix of move-up buyers and new homebuyers whose purchases allowed existing homeowners to move up. The situation is such, he said, that there is drastically reduced inventory of homes in the $100,000 to $160,000 range — prime first-time homebuyer territory price-wise — in Cleveland’s Ohio City neighborhood. Talk about lack of inventory was last heard years ago, amidst the housing boom.
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