Tax credit helps boost area home sales 20 percent

A federal tax credit that benefits first-time homebuyers is helping to bring home sales in the nine-county Indianapolis
area out of their funk.

Home-sale agreements in October climbed 20.1 percent compared with the same month last
year, rising from 1,792 to 2,153, according to a report released Tuesday by F.C. Tucker Co.

“Certainly the first homebuyer’s tax credit was a big part of the resurgence,” Jim
Litten, president of F.C. Tucker’s residential real estate services division, said in a prepared
statement. “We are pleased with the recent extension of the tax credit and expansion to include
existing homeowners.”

The new law extends an $8,000 tax credit for first-time buyers
that was to have expired later this month. It now covers homes purchased or under contract through April 30 of next year.
It also creates a new $6,500 tax break for existing homeowners who have lived in their current residence for at least five
years.

In the metropolitan area, pended home sales increased last month in every county except
Hancock, where agreements dipped by just one, to 76.

Shelby County registered the largest jump. Sales on 47 homes
were pending in October, representing a 62-percent increase from the same month in 2008.

Home-sale
agreements rose 17.6 percent in Marion County, where sales were pending on 1,062 homes in October.

They were up 21.8 percent in Hamilton County, to 363.

Through the first 10 months of the year, area home-sale
agreements are down 2.6 percent from the same time frame in 2008.

But, on another positive note, the number of
homes on the market fell 15.1 percent from October 2008, meaning the available inventory may be beginning
to stabilize.

“Less inventory and increased demand bring more consumer confidence to
the market,” Litten said. “This is the closest we’ve been to a balanced market in three
years.”

The average sales price in the nine-county area continues to decline, however.
Through October, prices fell 4.5 percent, to $138,904, compared with the same time frame last year.

Year-to-date
prices in Marion County fell 3 percent, to $103,257. The average sale price dropped the most in Shelby County, falling
14.4 percent, to $87,061.

None of the nine counties registered an increase in the average sale price.