Tax Credits Sweeten Many Homebuyers' Deal

fromWOI

The National Association of Realtors reported Thursday an increase in existing-home sales in March, another indication that buyers are rushing to take advantage of federal tax credits before they expire next week. But it's unclear how long that boost will last.

It has been a busy month for Karen Wendl, 25, who works in jewelry sales, and Jason Atherton, 30, a Marine recruiter. The couple just bought their first house and plan to marry next April.

The one-story, three-bedroom tan house, which they bought for $185,000 in the suburb of West Des Moines, is nestled in a new development bordered by farmland and gravel roads. It looks modest on the outside, but the front door opens to a spacious living room, dining room and kitchen area.

Wendl says the house is small enough for the two of them, but big enough to entertain.

"I have ... 18 nieces and nephews under the age of 10, so we always have a guest [and] friends over on the weekend," she said.

The couple bought the house with help from the $8,000 federal tax credit for first-time buyers, plus a $5,000 grant Atherton qualified for as an active-duty service member.

Their real estate agent, Wendl's older brother Scott, says business has been brisk. That's largely due to people trying to get in on the first-time-buyer credit, or a $6,500 credit for some repeat buyers.

"Their goal is to try to find something before the end of the month because it's free money and they might not see it again for a long time or ever again," Scott Wendl said.

All those buyers helped push up existing-home sales at a seasonally adjusted rate of almost 7 percent in March. The realtors' association reports that these numbers are up 16 percent from a year ago.

Walter Molony, a spokesman for the group, says sales will most likely drop off a bit after the credits expire. But he predicts a longer-term recovery in the housing market, provided the economy creates more jobs.

"There are scenarios where we will not see the improvement that we want, and frankly the crystal ball has never been hazier than it's been the past couple of years," Molony said. "But I would say at this point we're more hopeful than we've been in a long time."

Scott Wendl is optimistic, too. But right now he's trying to reassure worried clients who still have houses for sale.

"It's almost the sellers are more nervous because they know that the magic window is the end of this month," Wendl said. "Their thought is that if their house doesn't sell by the end of April, there's no more buyers left out there and real estate's just going to be dead."

Wendl worries that after next week, buyers may spend more time shopping around before they make an offer.

Atherton and Wendl say the tax credit did push up their timeline a bit. Even after paying $2,700 to break a lease on their old apartment, Atherton says they came out ahead.

"It definitely ... motivates you to get into a house versus waiting six months and not getting $8,000," he said.

Karen Wendl said it was it was a lot of things falling into the right place at the right time.

"We found the right house, it was the grant, the tax credit, we didn't like where we were at, so it was just a combination of everything," she said.

Real estate agents like Scott Wendl hope that more people in the coming months will decide it's the right time to buy a house -– even without $8,000 to sweeten the deal.

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