Tax credits credited for home purchase bump

Thanks to extended federal tax credits, single-family detached home sales in Northern Colorado showed positive numbers through the first half of 2010, finishing on the plus side over the same period last year in all markets.

Home sales data compiled by Loveland-based Information and Real Estate Services through June shows Fort Collins with the most active market, recording 243 more sales than in the same six-month period in 2009.

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Although the year started slowly with January down by 14 percent compared to January 2009, home sales in Fort Collins steadily improved through the first half of 2010, hitting a 26 percent increase in May over the prior year and achieving a 24 percent increase in June.

Since April, the average number of days on the market has dropped to 108 days from 114 in June 2009.

Rick Hausman, an agent with Benchmark Realty in Fort Collins, said he believes the $8,000 first-time homebuyer tax credit made likely buyers get off the fence and purchase a home a little sooner than otherwise.

“I think the main thing it did was speed up transactions that may have happened anyway,” he said. “Our June showings were down, and I think that’s where the evidence is confirming that buyers moved up their time frame.”

First-time homebuyers could also take advantage of a tax credit in the first half of 2009, but the federal government sweetened the deal in November 2009 by increasing income limits for qualified buyers from $75,000 to $125,000 for single taxpayers and from $150,000 to $225,000 for married couples filing jointly.

The Loveland-Berthoud market showed similar growth for the first half of 2010, with steadily increasing numbers of home sales through the period. The market finished June with 149 more home sales over the same period in 2009.

While the average number of days on the market held steady in June at 121, the median sales price jumped from $207,500 in June 2009 to $234,000 this year.

“We’re looking really good,´ said Kurt Albers, a broker associate with Century 21 Humpal Inc. and former president of the Loveland-Berthoud Association of Realtors. “It’s not like it was in 2007 and just booming, but it’s been a gradual progression of increased sales.”

Albers said the best-moving properties are below $260,000 and up to about $325,000. The other market doing well is the most expensive.

“It’s funny, but the upper-end stuff seems to be moving, but these are generally the people who aren’t affected by the recession,” he noted.

Greeley-Evans weakest

Of the three main residential markets in Northern Colorado, the Greeley-Evans area had the weakest sales gains for the first half of the year, finishing the period with only 20 more homes sold than in 2009.

On the plus side, however, the average days on the market was lower for every month except January and finished in June at 92 days compared to 102 for June 2009. In addition, the median sales price in Greeley-Evans was higher for every month of the period, finishing at $137,000 in June compared to $135,000 in June 2009.

John DeWitt, an agent/broker with ReMax Alliance and former president of the Greeley Area Realtor Association, said he thinks the Greeley-Evans market got off to a good start in 2010.

“Everybody had a great spring but it has slowed down a bit,” he said. “I credit that to the tax credit, quality affordable homes in Greeley and historically low interest rates.”

DeWitt said Greeley-Evans has dramatically slashed its existing home inventory because the city has some of the lowest-priced homes in the region.

“We have a smoking-hot market in Greeley with homes under $125,000,” he said. DeWitt also noted that some local homebuilders have returned to building spec homes in the $160,000 to $200,000 price range “and they are selling.”

“It’s exciting to see those houses being built on spec again,” he said. DeWitt said with only about a three-month inventory in lower-priced homes, “We’re seeing multiple offers and bidding up in price.”   

The first six months of 2010 were also good for the Estes Park home market, finishing up 18 home sales over 2009. While the average number of days on the market rose from 156 in June 2009 to 183 this year, the median sales price jumped in June from $285,000 last year to $355,900 this year.

Albers said he thinks home sales for the rest of 2010 should be fairly healthy despite the demise of the tax credits.

“We’re finding if we can get the financing we’ve got a pretty deep pool of buyers out there, including investors and people out of state who want to move here because of how we’ve been rated,” he said.

Hausman said August’s home sales numbers may tell the tale on home sales post-tax credits. They are still having an effect because loans in the pipeline on April 30 have until Sept. 30 to close to still realize the credit.

“August is usually a pretty good month for real estate in Northern Colorado, so it’ll be nice to see what the demand really is,” he said.