Like other Clark County real estate agents, Carolyn Crawford says she is selling more houses these days, despite the fierce competition for a smaller pool of finicky buyers.
“You need to work harder and smarter” in the persistent buyer’s market, said Crawford, who hires help to get her listings in tip-top condition. She researches for zoning issues and welcomes buyers to open houses with freshly baked cookies and glowing candles.
To clinch a sale, Crawford touts historically low home mortgage interest rates and a federal tax credit for buyers — a $6,500 write-off for move-up buyers who are selling their primary residence and an $8,000 credit for first-time buyers. But the government incentives are about to end, causing Crawford and other local Realtors to wonder about the market’s momentum as it enters the busy spring selling season.
“The interest rates and the tax credit are the biggest motivators,” said Crawford, an agent for seven years with Coldwell Banker Barbara Sue Seal Properties.
Clark County’s housing market is off to a hopeful start this year, with a total 1,177 new and existing homes sold in the first three months ending in March. It was a 30 percent increase, up from 900 units sold, from the first quarter of 2009, according to “benchmarks,” a report issued by Vancouver-based Riley & Marks Inc. appraisal firm.
But home buyers now have just 13 more days to qualify for the 2010 tax write-offs with contracts that must be signed by April 30 and close by June 30.
“We just don’t know what’s going to happen after this tax credit goes away because we’ve never had anything like it before,” said Toni Travis, a Vancouver sales agent with RealtyPro.
She said the incentive directly accounted for two of the last three home sale transactions made by Travis and her business partner-husband, Tony Schmid.
Bottoming out
Other realtors envision a different scenario. They feel the tax credit hasn’t been the main driver in home sales, but instead was a cushion that created a softer landing for the market.
Schmid says it took the sting out of falling home prices by helping sellers stay near their bottom-line asking price.
Home sales
JANUARY THROUGH MARCH
Year Units sold
2010 1,177
2009 900
2008 1,158
2007 1,860
2006 2,425
Median home prices
MARCH
Year Price
2010 $210,000
2009 $224,000
2008 $250,000
2007 $260,000
2006 $251,701
Source: Riley & Marks Inc., Vancouver
“I think it helped us reach the bottom,” Schmid said.
He and others predict Clark County home values will continue to gradually soften, as sellers disperse a glut of bargain-priced foreclosures and short sales. Such under-priced properties drag down median home prices and keep the housing market just out of reach for move-up buyers who must sell their current homes before they can buy again. Many owe more for their current home than it will fetch on the market, Travis added.
“The $8,000 tax credit has been a huge incentive for first-time buyers, but we don’t see as much interest from the move-up buyers,” she said.
In March, Riley & Marks reported the median home price — half sold for more, half for less — dropped to $210,000 for all homes sold, compared with a median of $224,000 in the same month last year. The March median price was down 19.2 percent from the height of the booming housing market in 2007, when the median home price was $260,000.
But sales could still improve without the incentive, albeit at a more even pace, even if prices continue to weaken.
“I think we’re in a stabilizing period. You might see sales go up and down a bit, then pretty much flatline,” said Mike Lamb, an associate broker with Windermere Real Estate/Stellar Group in Vancouver. “I don’t really expect (sales) to plummet, but the jury’s still out.”
That is, unless sellers refuse to lower their prices, unemployment — at 14.8 percent in Clark County in March — stays high or interest rates continue to climb.
Rising rates
At least one of those three big “if’s,” has already started to happen.
Home lending rates increased as high as 5.21 percent for a 30-year loan this month, a smidgen higher than the rates at this time last year, but well above December’s record low of 4.71 percent.
Until recently, mortgage rates were pushed down by a national campaign to reduce borrowing costs for consumers, in which the Federal Reserve purchased $1.25 trillion in mortgages and mortgage-backed securities.
The program ended last week, immediately ushering in a rate increase that could inch higher through the summer, said Ron Wysaske, president and chief operating officer of Vancouver-based Riverview Community Bank.
“Who knows where it will head,” Wysaske said, “but definitely, because the government will not be buying those mortgage backs, we are going to see higher rates.”
