For the past two months, Clark County real estate agents worked seven days a week and builders’ sales offices stayed open late as home buyers scrambled to make offers to take advantage of federal tax credits that expired at midnight Friday.
Vancouver home buyers Tony and Tiffany Burleson were among them. They scrambled to get an offer accepted on a house within two weeks of the deadline. The husband-and-wife buyers signed a contract April 24 to purchase their first family home and Thursday signed the mortgage loan papers to buy the house in the Minnehaha area.
o Thanks in part to the various tax credits, Clark County total sales of new and pre-owned homes surged
27.7% in March from a record low a year earlier.
o New-home building increased by 400% in March, as measured by permit applications to build single-family homes.
o Thanks in part to the various tax credits, Clark County total sales of new and pre-owned homes surged
27.7% in March from a record low a year earlier.
o New-home building increased by 400% in March, as measured by permit applications to build single-family homes.
They feel relieved to have qualified for the $8,000 tax credit. The refund will help with move-in expenses, said Tony Burleson, 29, who stays at home full time to take care of daughters Kaydence, 6, and Cameron, 3. Tiffany Burleson, 29, works full time as an operations manager for Oregon Health Systems in Lake Oswego, Ore.
“The first thing we need to do is buy a washer and dryer, a refrigerator, and a lawn mower. We’re in an apartment right now,” Tony Burleson said.
The tax incentives — offered to both first-time buyers and some current homeowners — have fueled a strong spring selling season and helped home prices stabilize. Real estate agents hope the burst in activity, along with the lifting of general economic gloom, will propel the housing market for the rest of the year.
“I still have some buyers who are continuing to look (for a home), whether they get the tax credit or not,” said Shawn Sturos, the broker who helped the Burlesons find their new home.
But Sturos, who has been working long days juggling between 10 and 15 clients over the past two months, said she expects the rush to slow to a more manageable pace through the rest of the summer.
“It’s exhausting,” said Sturos, an agent with Coldwell Banker Barbara Sue Seal Properties.
Market stimulation
Congress included the temporary tax credit in the $787 billion stimulus package signed into law a month after President Barack Obama took office last year. The idea was to bring the housing market back to life. Lawmakers, after intense lobbying from the real estate industry, agreed last fall to extend it until April 30.
Nearly 1.8 million households had used the credit as of mid-February at a cost of $12.6 billion, according to the Internal Revenue Service.
The government incentive offered buyers who haven’t owned a home for three years a tax credit of 10 percent of the purchase price, up to $8,000. Single buyers with incomes above $145,000 and couples who make more than $245,000 were not eligible.
There was also a credit of 10 percent, up to a maximum of $6,500, for buyers who were selling their primary residence after at least five years.
Thanks in part to the enticements, Clark County total sales of new and pre-owned homes surged 27.7 percent in March from a record low a year earlier. New-home building, meanwhile, increased by a whopping 400 percent in March, as measured by permit applications to build single-family homes.
Typically optimistic, local home sellers and builders expect the numbers to keep climbing after two years of slumping sales.
“The supply (of new homes) here is down, so it will definitely stay busy, said Michael Shanaberger, sales and marketing director of Vancouver-based Manor Homes, which is selling homes in 16 subdivisions throughout Clark County.
The company’s sales increased by nearly 14 percent in 2010. Manor Homes has sold 82 houses since January, compared with 72 homes sold during the same four months of 2009, Shanaberger said.
He attributes more than half — about 45 sales — to the tax credit, which often helped seal the deal.
“We’ve been putting in some long hours,” Shanaberger said.
Others say the sales surge could be short-lived after the tax credit is gone, although they don’t anticipate sales to drop off until the second half of the year. Some expect prices to plunge as well, especially if mortgage rates rise and a wave of foreclosed homes hits the market.
“We saw a similar spike in mid-November, people rushing to meet the deadline” before the extension, said Scott Mikel, a broker with Vancouver-based Scott Mikel & Associates. “But we expect the market will be OK this spring and probably flatten out in the fall.”
Despite coming down a bit from last year, the number of foreclosures in the Clark County market remains high. One out of every 487 households had a missed mortgage payment or was in foreclosure as of March, according to RealtyTrac, a California-based real estate data service.
Still, the housing market seems finally to be regaining its footing after the worst downturn since the Great Depression.
Numerous government measures have helped. They include the tax credit, the Obama administration’s $75 billion foreclosure prevention plan, the Federal Reserve’s $1.25 trillion program to drive down mortgage rates, and about $126 billion in taxpayer spending to stabilize mortgage finance companies Fannie Mae and Freddie Mac.
The Obama administration touts its efforts to stabilize the market as a success.
“For most Americans, their house is their most important financial asset,” Treasury Secretary Timothy Geithner told lawmakers Thursday. “As the financial crisis wreaked havoc on household wealth, the administration moved to protect this critical component of stability.”
Skeptics say that these measures are an attempt to manipulate market forces and that they are leaving housing vulnerable to a dangerous double dip. Some economists say the main effect of the first-time buyer tax credit was to bring would-be homeowners into the market sooner.
“Most of the benefits went to people who would have bought a home anyway,” said Patrick Newport, an economist at Lexington, Md.-based IHS Global Insight.
Others say the incentive added to the sense of home-buyer optimism that is generally present among springtime Clark County home buyers.
They expect the sales boost to continue through September, Scott Mikel said.
“The spring is an optimistic time for everyone. We generally tend to see an upswing in sales around April or May, he said.
Unfortunately for sellers, bottom-line prices could continue to fall as marketers work to keep buyers in the market.
At least one real estate company is launching its own version of the federal tax break, called the buyer bonus program. The plan asks sellers to agree to refund to buyers 3 percent — up to $8,000 — of the purchase price of the house, said Don Gladson, a designated broker with Coldwell Banker Barbara Sue Seal Properties.
“The government program has had an extremely positive effect on our industry, but we believe there are a lot of buyers out there who are late coming to the plate,” he said.
The Associated Press contributed to this story.
