BY JIMMY SETTLE
May 25, 2010
In Clarksville and across the nation, the homebuyer tax credit helped to incentivize sales of new and existing homes.
Now, that tax credit has expired, and sellers, prospective buyers and Realtors are looking ahead to a new kind of marketplace ? or at least a return to familiar days.
Homebuyers rushed to take advantage of the government incentives and record-low mortgage rates in April, giving the nationwide housing market its biggest boost in five months.
In Clarksville, the homebuyer tax credit has been described as an effective business tool, although many here say this market is so unique compared to the nation, that the tax credit itself had lesser impact here than in other areas of the country.
"In general terms, our market has always been good to stand on its own," said David Greene, vice president of the Clarksville Association of Realtors, and managing broker for Crye-Leike Realtors' Sango office.
"Actually, our market here is down about 10 percent over this time last year," Greene said, "not that that's a bad thing, but inventory has dwindled some and that's the reason."
Now that the homebuyer tax credit has expired, U.S. market watchers say any improvement in the post-recession market will depend mainly on the lure of historically low mortgage rates.
Some economists say that won't be enough.
"Although mortgage rates have fallen sharply, the combination of high unemployment, heavy indebtedness and tight credit suggest to us that demand will stumble," said Paul Dales, an economist at Capital Economics.
The tax credit's impact is expected to linger for a while, however. While homeowners had to have a signed sales contract by April 30, buyers have until the end of June to complete their sales. The federal government offered first-time buyers a tax credit of up to $8,000. Homeowners looking to upgrade were able to qualify for a credit of up to $6,500.
Sales were up in all parts of the country except the West. The gains were led by a 21.1 percent jump in the Northeast and a 9.9 percent rise in the Midwest. Sales also rose 8.6 percent in the South.
The Associated Press contributed to this report.
Jimmy Settle, 245-0247
Homebuyers Take Advantage Of Tax Credits In April - Leaf Chronicle, Clarksville, TN
May 25, 2010