Tuesday, Dec. 01, 2009

Alabama home sales surge

Homebuyer tax credit extension fuels some sales, veterans say

The Alabama side of the Chattahoochee River continues to buoy the local housing market, with home sales up in Phenix City and the Fort Mitchell area through the first 10 months of this year.

The housing sector as a whole, meanwhile, received a shot in the arm from the federal homebuyer tax credit program that was set to expire Monday, but now has been extended and expanded into next spring.

“I think (the tax credit extension) was a huge deal because there were a lot of people scrambling around and panicking and trying to take advantage of it. They were going to be short-circuited,” said Dan Parker, principal broker and co-owner of Columbus-based Coldwell Banker/Kennon, Parker, Duncan & Key Realtors.

The company sells homes in Georgia and Alabama, with Parker saying business is up 10 percent this year over a year ago.

Much of that growth has come in Phenix City and the unincorporated community of Fort Mitchell in southeast Russell County, which is near Fort Benning’s back entrance.

Home sales in Phenix City so far this year are at 622, up from 555 a year ago, according to the Multiple Listing Service. Both the median list price, at $149,000 this year, and the median selling price, at $146,500, are up from 2008.

In Fort Mitchell, sales have risen from 286 homes January-October 2008 to 327 so far this year. Median list price, at $165,350, is down slightly, while median selling price, also at $165,350, is up a bit.

Compare those areas to Columbus, which stands at 1,248 homes sold through October, down from 1,482 over the same 10-month period a year ago. Both the median list price, at $139,900, and median selling price, at $139,000, are down from 2008.

If not for the federal tax credit program, which offered first-time homebuyers a carrot up to $8,000, things could have been worse, said one local homebuilder.

“I’m sure there’s a number of people out there who took advantage of that,” said Dave Erickson, president of Grayhawk Homes. “The cannibalization of future sales is going to be the question mark, and what impact that will have a little later down the road.”

Erickson, who builds single-family dwellings in Columbus and Phenix City, is on pace for 165 sales this year, his third-best year ever. He sold about 250 homes annually in 2005 and 2006. Between 25 and 35 of this year’s sales were likely influenced by the tax-credit program, he said.

“In a lot of cases, the people that I talked to were very serious about buying a house anyhow,” the builder said. “The first-time homebuyer (program) probably got them to do something, either built their confidence that they were OK to do it, or helped them to pull the trigger in general.”

The tax-credit program has been extended to contracts signed by April 30, 2010. But aside from first-time buyers, it offers those who have previously owned a home a tax credit up to $6,500. It also extends the credits an extra year for some U.S. military and civilian government personnel.

The tax-credit extension comes with the Commerce Department reporting last week a 6.2 percent jump in new-home sales in October. The South led the way, with sales leaping 23 percent, compared with moderate to sharp decreases in the West, Northeast and Midwest.

Mortgage rates also continue to hover near or at record lows. A week ago, a 30-year fixed-rate note could be had for an average 4.78 percent, while the 15-year rate was at 4.29 percent.

Parker, who has been in the real-estate business since 1966, thinks the Columbus market is poised for a significant boost in 2010. He expects growth from local companies, as well as Fort Benning’s expansion — including the addition of the U.S. Army Armor School from Fort Knox, Ky. — to be the economic engines.

“We’re beginning to have people from Fort Knox trickle in,” Parker said. “The big burst is supposed to come sometime in the late first quarter of next year.”