MIAMI — October home sales in the U.S. South vaulted 23 percent from last year as buyers scrambled to grab an expiring tax credit and wrestled for lower-priced homes, the National Association of Realtors said Monday.
Real estate agents from Texas to Maryland credited sales increases to low mortgage rates, affordable prices and the tax credit of up to $8,000 for first-time buyers. The incentive was set to die Nov. 30 before Congress extended it into next spring and added a $6,500 credit for current homeowners who move into another property.
Median sales prices in the South did fall to $151,100, a 6 percent decline from last October. Strong demand from first-time buyers in Florida and Washington D.C. led to some bidding wars over low-priced homes, including foreclosures, said Vicki Cox Golder, president of the Realtors group.
Nationally, October sales of existing homes were up by one-fifth compared with last year, without adjusting for seasonal factors. The median sales price dipped 7 percent to $173,100.
Re-sales of houses and condominiums increased in all 18 Southern metro markets covered by The Associated Press-Re/Max Housing Report, also released Monday.
Fourteen Southern markets saw prices fall on a year-over-year basis. Foreclosure-heavy Miami posted the steepest drop — a 30 percent decline to $150,000. Little Rock, Ark., Birmingham, Ala., and Houston recorded price increases from October 2008, while New Orleans held steady, the AP-Re/Max report showed.
The AP-Re/Max report analyzed sales transactions in the metropolitan statistical areas recorded by all real estate agents, regardless of company affiliation.
While prices in Miami are down, sales rose 28 percent in October, compared with the same month last year. Miami’s real estate market not only benefited from the tax credit, but also from Canadian and European buyers taking advantage of a relatively weak dollar and affordable prices.
Real estate agent Ellen Windheim saw a difference in buyers’ attitudes compared with last year, when the country was mired in the recession and the financial market meltdown.
“There’s an optimism that the (economic) stimulus has done something for us,” said Windheim, an agent with Esslinger Wooten Maxwell in Aventura, Fla. “There’s obviously a tremendous amount of confidence out there.”
In Raleigh, N.C., first-time buyer Louise Brunson snapped up a three-bedroom, 2,200-square foot town house for $235,000 in the city’s northwest section. She and her husband originally planned to buy 1½ years ago but decided to wait until prices fell a bit further.
The Brunsons looked for about three months before deciding on the town house in a well-lit neighborhood in a good school district for their daughter.
“We suspected that (the tax credit) might be extended, but we did want to go ahead and get it done to be on the safe side,” said Brunson, a 39-year-old paralegal.
Buyers like the Brunsons drove a 16 percent increase in sales from last October in Raleigh-Durham, where the median sales price dipped 7 percent to $186,000, the AP-Re/Max report showed.
Real estate agent Harrison Tulloss said homes priced $180,000 and below are moving fast ahead of the holidays.
“People who are looking, they are serious,” said Tulloss, an agent with ZIP Realty in Raleigh-Durham. “They’re not riding around with me if they need to go shopping or buy a turkey.”
In Houston, home re-sales rose 12 percent from last October, when the state was reeling from Hurricane Ike. The pending elimination of the first-time buyer tax credit also drove people into the market, said Vicki Fullerton, who chairs the Houston Association of Realtors.
Dropping inventory due to accelerated sales was the story in Atlanta. The number of homes listed for sale fell 30 percent compared with October of last year, while sales rose nearly 7 percent, the AP-Re/Max report showed.
The first-time buyers’ tax credit “got them off the couch to look at homes,” said ZIP Realty agent Ed Neubaum in Atlanta.Neubaum noted some challenges in the Atlanta market, including a new flood of foreclosures expected to hit in January. Foreclosures are sold at a heavy discount, lowering values of nearby homes. Atlanta’s median sales price was $141,000, a drop of 6 percent, the AP-Re/Max report showed.
And, despite the inventory decline, sellers reluctant to lower their prices have seen their homes languish.
“They’re getting burned out keeping their house ready for sale,” he said.
Adrian Sainz/The Associated Press