DeKalb County housing sales decline
WASHINGTON — Home sales on the national stage far exceeded expectations last month, surging to the highest level in 2½ years as first-time buyers rushed to take advantage of an expiring tax credit.
The National Association of Realtors said Monday that home resales rose 10.1 percent to a seasonally adjusted annual rate of 6.1 million in October, from a downwardly revised pace of 5.54 million in September.
The tax credit of up to $8,000 for first-time owners was originally set to run out on Nov. 30, but Congress renewed it earlier this month and broadened its reach. People who have owned their current homes for at least five years can now claim a tax credit of up to $6,500 for a home purchase. To qualify, buyers must sign a purchase agreement by April 30.
The Realtors report on October home sales reflect offers made before buyers knew the tax credit would be extended. "There was a lot of rush and hurry to complete sales" before the deadline, said Lawrence Yun, the trade group's chief economist.
But sales are likely to drop over the winter as buyers hibernate for a few months without the looming tax credit deadline.
While some buyers scrambled to take advantage of the credit, others may have held out due to rumors a bigger program was coming, DeKalb Area Association of Realtors President Rorry Heide said. She said expanding the program to repeat home buyers was "just genius," and projected it could help sell higher-priced homes.
"It's going to help those people who are not in short sales, not in foreclosures, to maybe make that leap of faith and put their home up for sale to get something bigger," she said. "It could really help those homes in the $200,000 to $300,000 price range."
National sales, which were nearly 24 percent above last year's level, had been expected to rise to an annual pace of 5.65 million, according to economists surveyed by Thomson Reuters.
The picture was less rosy in DeKalb County, were sales were more than 24 percent lower than in October 2008. There were 838 homes sold from January through October 2009, compared to 1,123 in the same time period last year.
"It's unfortunate. I thought it was going to be better," Heide said.
Nationally, the median sales price was $173,100, down 7.1 percent from a year earlier and off 1.6 percent from September. The local median price was $166,500, down 3.8 percent from last year.
In addition to lower prices, mortgage rates have been hovering around 5 percent since the spring, largely because of government intervention. That has helped restore housing affordability in large swaths of the country.
The inventory of unsold homes on the market fell about 4 percent to 3.6 million. That's a 7 month supply at the current sales pace, and close to a healthy stock of about six months.
Over the summer, the housing market started to rebound from the worst downturn in decades, aided by aggressive federal intervention to lower mortgage rates and bring more buyers into the market.
But experts forecast that prices will fall again. Most say they will hit a new low next spring, perhaps falling another 5 to 10 percent, as more foreclosures get pushed onto the market.
A record-high 14 percent of homeowners with a mortgage were either behind on payments or in foreclosure at the end of September, the Mortgage Bankers Association said last week.
• Daily Chronicle reporter Dana Herra contributed to this report.
