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Real estate market up over last year
Tax credit expires, but experts see hope
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Forsyth County News
One month after the $8,000 federal homebuyer tax credit expired, Forsyth County’s real estate market has survived.

“We have seen a slow down in sales for the month of May, but May 2010 looks like it’s still about 10 or 12 percent ahead of 2009 for the same period,” said Frank Norton Jr., president of the Norton Agency real estate and insurance firm.

The federal credit began as an incentive for first-time homebuyers. It was extended Nov. 6 to include up to a $6,500 credit for those who have
owned a home for at least five years. The extension on both credits expired April 30.

Despite fears the housing market would crash without the incentive, Norton said the market remains stronger than last year.

“We’re also seeing some high-price sellers who ... might be giving that $8,000 credit as part of their concession,” he said. “So we’re seeing some creative ways for selling houses, even though we don’t have a tax credit.”

The only potential downfall is that the summer months, which are typically the year’s strongest, could be diluted.

Between January and April, the tax credit pushed early purchases for people who would “normally buy in May, June, July and August,” Norton said.

“So we’re projecting a moderate sales period throughout the summer, whereas normally we have very brisk sales,” he said.

Realtor Scott Whelchel with Results Realty Services said not every house will sell the same this summer.

“New home sales are now looking up and the resale market is going to really take a beating,” he said. “There are such good deals on new homes right now, that there’s no reason for purchasers not to look at them.”

He said this could also be where home sellers may offer their own incentives. That would be more good news for buyers, but not sellers.

“Sellers of resales are really going to have to sharpen their pencils and compete with the foreclosures and compete with the new homes now more than ever,” he said.

While sellers may be struggling, Whelchel said they’re “better off than if we had just done nothing and there was no tax credit.”

“There’s no doubt in my mind that it made a difference,” he said.  

John Heath with ReMax 400 North released data showing nearly 625 homes sold between January and April. About 520 homes sold during the same time period in 2009.

Homes priced below $300,000 continue to make up the majority of the area’s sales, according to Heath’s data.

And distressed properties like foreclosures and short sales dominate the market, with some new construction beginning to surface.

About 45 percent of all home sales through April, Norton said, were likely due to the tax credit. But without it, there still is “55 percent of the market looking for houses.”

“You can buy today a $550,000 house for $400,000 in this market and people are taking advantage of that, regardless of the tax credit.”