Commercial & Residential Property Blog

The U.S. House on Tuesday agreed to give home buyers until Sept. 30 to close on eligible properties and still qualify for the home buyer tax credits.

Builders are rushing to finish homes so that buyers can close on them before the June 30 deadline to qualify for a federal tax credit.

JMP Securities analyst James Wilson says sales activities in California, Texas, and Arizona are approaching pre-April numbers in many markets. In some markets, builders are able to continue to raise prices and homes are selling at the strongest pace since before spring 2009, he says.

WASHINGTON – A rush of homebuyers aiming to meet a deadline to qualify for a federal tax credit pushed the number of signed sales contracts to the highest level since October.

Sales of newly built, single-family homes surged 14.8 percent to a seasonally adjusted annual rate of 504,000 units in April as consumers rushed to beat the deadline for expiring home buyer tax credits, according to data released by the U.S. Commerce Department today. This was the strongest level of new-home buying activity since May of 2008.

Existing U.S. home sales surged an unsurprising 7.6 percent in April from March to an annualized rate of 5.77 million, according to the National Association of Realtors on Monday. Compared with April 2009, sales were 22.8 percent higher.

The National Association of Home Builders (NAHB) wants potential home buyers to be aware that they still have the opportunity to take advantage of the $8,000 first-time home buyer or $6,500 repeat buyer tax credits, as long as they act quickly—the credits expire on April 30, 2010.

At least 43 percent of potential first-time home buyers told Zillow.com that extending the $8,000 federal tax credit would go a long way toward motivating them to buy a home in 2010,

Nearly 18 percent called the credit the “primary influence” in their decision; 25 percent said it would be a “significant influence;” 27 percent said the credit would have “some” influence on any homebuying decision; and 31 percent said it would have no influence.

Real estate professionals and home builders are pushing for an extension and an increase in tax incentives to encourage homebuying. Otherwise, they argue, that it is very likely that the current housing uptick will end on Dec. 1, when the tax credit does.

“The giddiness we see out there [about a recovery] is without merit,” says Richard A. Smith, CEO of Realogy, which is the parent company of Century 21, ERA, Coldwell Banker, and Sotheby’s International Realty.