The Daily News Record's take on our local housing market . . . .

Federal Tax Credit Boosts Home Sales (Jan 30, 2010)
Harrisonburg And Rockingham See Overall Buying Decline For The Year

By Jeff Mellott

HARRISONBURG - The looming expiration of a federal tax credit for first-time homebuyers in November is being credited for a doubling of Harrisonburg and Rockingham County home sales when compared to November 2008.

But while the news was good for those looking to sell before the original Nov. 30 deadline for buyers to qualify for an $8,000 tax credit, December was a return to more typical winter sales.

In the city and county, home sales increased from 42 in November 2008 to 83 in November 2009, according to the Virginia Association of Realtors. But the numbers dropped into the mid-60s for December.

The association also is crediting the buying incentive for boosting sales by 5.4 percent for the year in the Shenandoah Valley in 2009.

The Valley reporting region comprises Frederick, Clarke, Warren, Page, Shenandoah and Rockingham counties and the cities of Winchester and Harrisonburg.

The tax credit, which Congress has since extended, led to November being the third-highest sales month of 2009 for Harrisonburg and Rockingham County, said Scott Rogers, associate broker for Coldwell Banker Funkhouser Realtors of Harrisonburg.

Typically, November is a slow month for home sales, Rogers said.

Along with the tax credit, he said, some buyers have been encouraged about the overall home-buying climate because the amount of bad economic news has seemingly diminished.

Decline

While the number of sales received a boost for November, the increase was not enough to change an overall decline in sales and median prices for the city and county in 2009, according to Rogers, who also operates the Web site HarrisonburgHousingtoday.com.

Rogers' analysis of the city and county real estate market showed the sale of 561 single-family homes in 2009, which was a 14 percent decline when compared to 654 homes in 2008.

The median sales price of a home declined from $215,000 in 2008 to $204,900, for a nearly 5 percent drop.

The latest figures were significantly below 2004 and 2005, when the number of single-family homes sold hovered at 1,025 before dropping off to 909 in 2006, according to the Web site.

The median sales price of a single-family home jumped from $170,000 in 2004 to $210,000 in 2005, for a 24 percent increase, according to the Web site.

Townhomes

Many of the first-time homebuyers in November who took advantage of the federal tax credit bought relatively less expensive townhouses in Harrisonburg, Rogers said.

Still, the overall sales and price of townhomes declined from 2008 to 2009, according to Rogers.

The 282 townhomes sold in 2008 dropped to 252 in 2009. The median sales price went down from $167,250 to $161,888 last year.

The numbers contrast sharply with 2005, the peak sales year of the decade. That year, 644 townhomes were sold but the median price was $134,950.

Statewide, fourth-quarter home sales for 2009 increased by 18 percent from 2008, according to an association statement Monday.

"There's no question that [the number of] first-time homebuyers had a significant increase," said Lisa Noon, Virginia Association of Realtors vice president Lisa Noon.

The tax credit deadline has been extended to the end of June, Rogers said.

To qualify, a homebuyer must have a home under contract by the end of April and close by the end of June, he said.

Nationally, the Commerce Department reported Wednesday that sales of new homes fell unexpectedly in December.

According to The Associated Press, last month's results were the weakest since March and were only 4 percent above the bottom last January. Many in the industry, however, expect sales to pick up as the April 30 deadline for the federal tax credit nears.

Contact Jeff Mellott at 574-6290 or jmellott@dnronline.com

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Have any questions? Contact Scott Rogers at 540-578-0102 or scott@funkhousergroup.com