August 28, 2009
Single-family home sales rise in June, July
Real estate brokers say the biggest reason for the increase is first-time home buyer credit
The number of single-family home sales in Cortland County has been rising consistently since a winter slump, which hit bottom when only five homes were sold in January.
Cortland County home sales peaked in June, when 58 homes were sold, and then dipped slightly in July, when 49 homes were sold, according to the New York State Association of Realtors.
Home sales in June and July topped last year’s numbers.
Twenty-two homes were sold in Cortland County in June 2008, and 42 homes were sold in Cortland County in July 2008, according to the statewide association’s statistics.
The number of home sales statewide has risen consistently in each of the past few months, but the numbers are still below year-ago-levels.
In New York state, 8,398 homes were sold in July, compared to 8,711 homes sold in July 2008. In June, 7,404 homes were sold, compared to 7,921 in June 2008, according to the state Association of Realtors.
Local real estate brokers say the biggest reason for the increase is an $8,000 tax credit for first-time home buyers offered through the federal stimulus package. The program is scheduled to end on Nov. 30.
Other factors include low mortgage rates and rising confidence in Central New York’s housing market, which has remained fairly stable, despite a housing crisis that occurred in certain areas of the country, causing extensive losses from declining home values and delinquent mortgages.
The prices of homes sold in the county this year have remained very similar to last year’s prices.
The median price of homes sold in the first quarter of 2009 was $95,000, and in the second quarter it was $110,000. It was $104,970 in June and $104,500 in July.
The median price of homes sold in 2008 was $106,202.
First-time home buyers comprise a large portion of the current local real estate market, said Steve Cinquanti, president of the Cortland County Board of Realtors and principal broker for Homer-based Cinquanti Real Estate. Trade-up buyers, or people who sell their houses and buy houses of greater value, also make up a large part of the market, as many of them are selling to first-time home buyers, he said.
The market for homes selling at less than $150,000 is robust right now, while the market for houses in the $200,000 to $250,000 range is soft, Cinquanti said.
Because it generally takes 60 to 90 days for a home sale to close, first-time home buyers who want to take advantage of the tax credit should act soon, Cinquanti said.
Gov. David Paterson announced Aug. 10 that New York state will offer a federal income tax credit to first-time home buyers called the New York State Mortgage Credit Certificate. The program will enable first-time home buyers to claim a tax credit equal to 20 percent of their annual mortgage interest costs, potentially saving the average home buyer about $1,500 each year, according to a news release on Paterson’s Web site.
“The program will effectively extend, and in some cases improve upon the federal government’s $8,000 First-Time Homebuyer Credit,” the release states.
Cinquanti said he is not sure if this program will be as effective as the federal program, partly because it has not been widely promoted.
Neb Hage, principal broker for Cortland-based Hage Real Estate, said he thinks that many people who were interested in buying homes during the winter waited to see how the national recession would play out, but many of them are ready to move forward now.
Steve Terwilliger, principal broker for Cortland-based Seven Valley Realty, which operates in 32 upstate counties, also said home sales have picked up this summer.
“I think people are back in the mode of buying homes. We’re not out of the storm, but we can see brighter days coming,” he said.
Terwilliger said the biggest problem in Cortland County’s real estate market is high property taxes.
Increased property taxes devalue houses as fewer people can afford them at their previous values, Terwilliger said.
The number of pending home sales made in June and July suggest that final home sales in August and September will be similar to the Association of Realtors’ totals from June and July.
Home sales close, or become final, when money is transferred, and pending home sales are made when someone commits to buying a home. About 10 percent of pending home sales in the local market are never finalized, Cinquanti said.
In June, there were 62 pending home sales in the county reported in the Cortland County Board of Realtors Multiple Listing Service, compared to 53 pending home sales reported in June 2008 and 52 reported in June 2007, Cinquanti said.
The Multiple Listing Service compiles home sales statistics from all real estate offices in the county.
In July, there were 57 pending home sales reported, compared to 59 pending home sales in 2008 and 51 in 2007.
Most of the pending home sales made in June and July will probably close this month or in September.
It has been more difficult for prospective home buyers to get loans, Terwilliger said, as banks throughout the state are requiring them to have higher credit scores and put more money down.
Cinquanti said it takes a little longer to close a loan today as a result of a law passed recently that separates originators, who work at banks, from home appraisers, who assign a market value for homes. Because the originator is no longer allowed to know who the appraiser is in a deal, appraisers often have to travel to different counties to appraise homes, which can lead to less accurate appraisals, in addition to prolonging the process, Cinquanti said.
Cinquanti said it is hard to say if demand will decrease after the first-time home buyer tax break program ends.
“Demand, supply and prices are all pretty stable right now, so I’d like to think this trend will continue,” he said.
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