Local home sales boosted by federal stimulus program
A federal stimulus program for homebuyers gave a welcome shot in the arm to area realtors, who posted "sold signs" on numerous properties throughout the region.
"According to figures I got from the Lakes Country Association of Realtors, from Jan. 1 through April 22 the total number of city residential homes sold was 56 this year," said Justin Clack of Coldwell Banker - Clack & Dennis .
The LCA includes Detroit Lakes, Pelican Rapids, Park Rapids, Perham, Frazee, Mahnomen, Ada, Fergus Falls and Vergas.
But 11 of those homes sold were in Park Rapids, compared to two residential homes sales for the same period in 2009.
"It was definitely an incentive, for sure," said realtor Greg Grover of Prudential Park Rapids Real Estate.
"We had more sales from that perspective, people, that were buying because of that."
Both Clack and Grover said the stimulus, $8,000 for qualified first-time homebuyers and $6,500 for homebuyers in general who weren't first-timers, enticed people who were considering buying a home and those who maybe weren't but thought the money was too good to pass up.
"I think there were some people looking at that and it convinced them that this was the time," Grover agreed. "And there were some that maybe weren't looking before that, that became interested because of that."
Those incentives ended April 30, so realtors are still tallying up the final numbers while completing the closing paperwork.
"Everything had to be under contract by April 30," Clack explained
The 56 homes sold in the region compares to 34 sold during the same period in 2009, Clack said.
"It was a 64 percent increase," Clack said.
"The average sale price went from $97,552 to $113,558, for a 16 percent increase," he added.
Clack said generally home prices have been declining, but the latest report would indicate otherwise in our area.
"That's all I can tell you," he said of the most recent sales figures.
Most of the homes sold were city residential structures, both men said, not lake properties.
"I would say it was more moderately priced properties and more city properties that we saw (sold)," Grover said. Typical "starter" homes moved well.
"For $113,000 you could get a three bedroom, two bath home for that," Clack said. "And in some markets it could even be a little less. There's other homes where the prices aren't as high as they are in Park Rapids."
The tax incentives were part of the Worker, Homeownership, and Business Assistance Act of 2009.
It extended the tax credit of up to $8,000 for qualified first-time homebuyers purchasing a principal residence. With congressional extensions, the tax credit applied to sales occurring on or after Jan. 1, 2009 and on or before April 30, 2010.
But if a homebuyer entered into a binding contract last Friday, if the home purchase is completed by June 30, it still qualifies, so the sales figures could rise even higher.
Income limits varied depending on when the buyer made the purchase.
The Act also established a tax credit of up to $6,500 for qualified existing homeowners purchasing a principal residence after Nov. 6, 2009 and on or before Friday that closes by June 30 with a binding sales contract.