The residential real estate market got a shot in the arm in November after President Obama signed the Worker, Homeownership and Business Assistance Act of 2009. The legislation extends through April the existing $8,000 stimulus tax credit for first-time homebuyers and adds a $6,500 credit for “move up” home buyers who have lived in their residences at least five years. The law includes caps based on home prices and income levels of buyers and does not apply to vacation homes.
Many local Realtors said they experienced a burst of buyer interest just as the holiday season hit, typically a relatively slow period in the industry in advance of January when many homes get listed for sale in hopes of selling them by the close of the school year.
The recession had a devastating effect on real estate companies, including Realogy Corp., the Parsippany, N.J.-based owner of Cartus Corp., an employee relocation services provider based in Danbury; and Coldwell Banker Residential Mortgage, the largest real estate agency operating in Fairfield County. Coldwell Banker had 1,500 fewer offices and 32,000 fewer agents as of September compared with a year earlier when Wall Street collapsed. Through the first nine months of the year, Realogy revenue from Cartus relocation services was $243 million, down a third.
In October, however, Fairfield County home sales were up 20 percent from a year earlier, according to the Warren Group, the Boston-based publisher of the Commercial Record. The price of the median home sold was down 4.4 percent from a year earlier.
“While gains in sales volume are pointing to a housing recovery, we have to keep in mind that home prices are still declining year-over-year, so the housing market hasn”™t completely turned a corner,” said Timothy Warren Jr., CEO of the Warren Group.
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Existing home sales were up 12 percent between September and October in the Northeast, however, according to the National Association of Realtors (NAR), and were 28 percent higher than a year ago. Pending home sales increased nationally a ninth straight month in October, the first time that has occurred since NAR started tracking the statistic in 2001. The greatest gains came in the Northeast, with pending home sales up 44 percent from their levels a year ago.
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A sale is listed as pending when the contract has been signed but the transaction has not closed, though the sale usually is finalized within one or two months of signing.
NAR economist Lawrence Yun cautioned that home sales could dip in the months ahead.
“The expanded tax credit has only been available for the past three weeks, but the time between when buyers start looking at homes until they close on a sale can take anywhere from three to five months,” Yun said. “Given the lag time, we could see a temporary decline in closed existing-home sales from December until early spring when we get another surge, but the weak job market remains a major concern and could slow the recovery process.”
Through October, building permits were off 47 percent in Fairfield County from the same period in 2008, with builders filing plans for nearly 2,700 new residences this year. Norwalk and Danbury were the exceptions, with builders planning more than 650 new units there alone.
Earlier this month, Timber Oaks Association obtained a permit for eight more condominium units under construction at a large new complex on the Danbury-Bethel line, at an estimated cost of $1.1 million.
