Finally we get a little good news on the home-selling front: existing home sales rose in April, both nationally and in the South. That means if you are trying to sell your home, you may have had more than tire-kickers visiting recently. The surge in sales was not completely unexpected. We can identify several likely causes:
* The Federal Home Buyers Tax Credit for both first-time buyers and repeat buyers came to a much-publicized end but not before many last-minute contracts came in from those hoping to cash in on the tax incentive. So long as the buyer otherwise qualified and had a binding contract by midnight April 30, they could get the credit provided they close on the contract no later than June 30.
Congressional housing advocates like Sen. Johnny Isakson (R-Georgia) announced the end of this program some time ago, and made it clear that another extension was unlikely. This deadline fueled sales during April.
* Some sellers took the end-of-month deadline as an opportunity to sweeten the deal and make their home offering even more attractive.
Fearing that they might net even less after the incentive expired, some sellers lowered prices even more than they previously had, hoping to snag a sale. Others agreed to pay closing costs or other fees in exchange for a sale. Clearly, some were successful.
* April is traditionally one of the strongest selling months for residential real estate in the South. The weather becomes pleasant, and the days start getting longer, allowing favorable evening showings. The dogwoods begin blooming, and home-buying activity picks up.
* And, finally, long-term interest rates have remained at historically low levels, rewarding borrowers with lower carrying costs month after month.
Thirty-year fixed-rate loans continue to be available around 5 percent, with 15-year programs about a half a percent less.
Economists have been predicting higher rates by year-end, but we have not yet seen the beginnings of any climb.
Existing home sales include detached single-family homes, townhouses, condominiums and co-ops. Nationally, sales rose 7.6 percent to a seasonally adjusted annual rate of 5.77 million, while sales in the South rose 8.6 percent and were up 23 percent from a year earlier.
As the law of supply and demand dictates, higher sales resulted in higher prices as well. Metro Atlanta existing single- family homes increased in median selling price to $120,800 from a March number of $113,600, according to the report from the National Association of Realtors.
John Adams is an author, broadcaster and investor. He answers real estate questions on radio station WGKA (920am) every Saturday at noon. For more real estate information or to make a comment, visit www.money99.com.
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