Augusta-area home sales sank 30 percent in July, mirroring a national trend, as federal tax credits for homebuyers expired.
In July, local buyers closed on 359 homes, compared with 513 the previous year, according to the Greater Augusta Association of Realtors.
"When they did away with the homebuyers tax credit, I knew that was going to happen," said Jim Courson, the owner of Jim Courson Realty in Martinez. "You can't do away with a program like that and not put something in place of it and not expect something like that."
Across the country, sales of existing homes dropped 25.5 percent from a year ago, according to the National Association of Realtors.
The local picture was rosier for the year as a whole. From January through July, home sales increased 12 percent, the Augusta Realtors group reported.
Those numbers were likely buoyed by the tax credits, which awarded first-time homebuyers with an $8,000 credit and previous buyers with a $6,500 credit as long as they closed on their purchases by the end of June.
Home sales peaked in Augusta in June, with 569 sold. April and May sales also outpaced July, which is typically a strong sales month, real estate agents said.
July's dip should not be a major concern unless housing numbers continue to decline, said Lloyd DeFoor, the president of the Augusta Realtors group.
"Overall, our market has been so much better than most of the rest of the country," he said. "We didn't have the bubble that some areas had, so we did not have the collapse that some areas had."
Home sales have rebounded after taking an initial dip when the tax credits expired, but prices continue to be depressed by 10 percent to 15 percent, said Michelle Lockhart, a vice president of Meybohm Real- tors.
Courson said there is only one way home sales can improve consistently in the long term.
"It doesn't matter if people are worried about jobs," he said. "If they don't have jobs and don't feel good about (the economy), they are just not going to buy homes."
In July, local buyers closed on only 359 homes, compared with 569 in June and 513 a year ago. April and May sales also topped the number in July, which is typically a strong month. Experts blame the decline on the expiration of the homebuyer tax credit.
| AUGUSTA | U.S. | |
| 2010 | 359 | 3.83 million |
| 2009 | 513 | 5.14 million |
Source: Greater Augusta Association of Realtors, National Association of Realtors
Comments
This proves that if taxes are lowered it WILL help spur growth in certain sectors.
We should CUT spending (including military) and CUT taxes. The private sector must be allowed to breath and it must have cash to run, much less, expand business.
Want job growth and economic recovery? Get the tax man off my back so I can spend MY money on things I need for MY business.
There should be NO TAXES on home sales. Zero.
Brad
I would have bought a house but as long as my employer keeps giving us furloughs and reducing our salaries.. I don't think so!!..
I am sure the tax incentives were initiated by the Bush administration. Why is Obama doing away with this great program?
Forget about Bush, let's move on.
Disssman, that well will eventually run dry. It is nice to disguise welfare as an incentive to buy a house, but it was a poorly thought out program from the start. Yes, it briefly stimulated house sales for a brief period, but, much like the Cash for Clunkers welfare scam, the pot has been emptied and it is now time to return to where we were before it started.
billoftt,
You must be joking. So you are saying that higher taxes on individuals is a better thing than less taxes?
Being able to keep more of the money that YOU earn is not welfare, it's just fair.
We should not have to pay taxes on first time house buys.
Brad
There are more houses for sale in North Augusta than have been in the last 14 years and they are not moving either. Even the big ticket houses on the river have no potential buyers. I really don't think it is the tax credit issue alone; these houses have been on the market almost a year.
I expect this exact same result with unemployment spiking again once the 2 year "stimulus" runs out. There is no point in funding something temporarily, unless you're just trying to kick the can on down the road.
The FairTax being enacted would result in exactly the opposite of this story. There will be nearly 10% more money per month in our pockets to spend when the FairTax becomes law.This will result in more productivity in the business sector and more and better paying jobs all across the country. This will result in more home sales along with increased sales in all sectors of business. And previously owned homes and cars and other items will not have taxes added to them at all under the FairTax. Only brand new, never owned products will have the FairTax attached to it. Well, I am off to work to give the government their portion of my labors, which I will not have to do when we axe the income tax in favor of the FairTax.
Read the news folks. No, not the glossy, people magazine-inspired news that CNN, ABC, MSNBC, et al give you. The REAL news.
We are in a depression now. There's no denying that. Experts say it will take 10 years to climb out of it. The person who came up with the hindenburg effect stock market predictor just pulled 100% of his stocks out of the market saying that it will plummet to 5000 soon. Jobs are being lost by the hundreds of thousands. Home sales are down & values are down. The stock market is already dropping. The obama/biden summer recovery is more like a summer disaster.
The tax credit for home buying, along with cash for clunkers ridiculously, only gave tax incentives to select few.
What we need is a real tax cut for everyone who pays taxes coupled with a 40-50% cut in federal & state government spending. The 50% who pay no taxes should get nothing. The government does not have enough money to pump more welfare into the hands of those not contributing to society.
Welcome to the new normal!
Ok tax comissioners get your pencils out and start raising home owners taxes. We support Augusta every year. Why can't you realize the average home in America has decreased in value ? Yet mine somehow increased,
only in Dis-gusta.
The tax credit brought out the buyers that may not have purchased this year and only did so because of the incentive. This tax credit may have spurred purchasing of homes in the short term and may have also exhausted the supply of potential qualified buyers for the long term. I do not forsee any changes in the near future until the housing market corrects itself. The price tags on some of the houses on the market are not realistic. I know that alot of people attempting to sell are upside down on what they owe to the banks and need to try and recoup. I also know that these people that are upside down are in essence attempting to pass that over priced house to the next buyer. In closing I do not believe the tax credits are the solution. The only way to correct the housing market is to realize the what a house is worth and not inflate its value.
If you have a home on the market in this area that is above 300K and especially in Richmond county, you can forget about it selling this year.. and you will be lucky to see it sell next year.
Brad, nowhere in my post did I even come close to insinuating that we should have higher taxes. As a matter of fact, if you reading and comprehension levels were on par with a seventh grader, you could clearly see that I was saying that these "stimulus" programs (funded by taxes which will be inevitably be raised as a result) are a bad thing.
The Cash for Clunkers program and the First Time House Buyer’s credit are not funds that were "earned," but funded by the public treasury, which is funded by the taxpayers.
When you compare a tax credits with welfare, yes, I do see that as someone who doesn't support tax credits or is trying to say they are bad.
The main problem your argument has is that it works on the assumption that this credit is paid for by other taxes.
A credit is a discount based on the taxes that WOULD be paid if it were not there.
I support doing away with all the taxes on transactions like this, what would you have them do? Continue with the taxes?
Brad
"A credit is a discount based on the taxes that WOULD be paid if it were not there."
And where do you thing that 8000 dollar discount on the purchase of a new house comes from, Brad? Is the builder or seller of the house giving it away? Is the realtor being VERY generous that day? Or is it a program funded by the public treasury, which is supplied by the conglomerate of taxpayers of this country? Could the Home Buyer Tax Credit be part of a 24 Billion Dollar Economic Stimulus Bill signed by Obama on February 17, 2009? A bill funded by the United States Treasury? A United States Treasury that 'generates' income for the United States Government to fund bills and programs through taxation of its citizens?
A program, I will also state based off of the information provided in this article, that failed to do anything more than just provide a brief 'surge' in home sales, only to result in slumping home sales after the program was finished, putting the home market back where it was before the program.
So you support maximum taxes on all homeowners for tranactions like these. Got it.
I happen to think we pay enough in taxes already. I am for getting rid of all the taxes on transactions like these.
house sales will jump up when the banks stop sitting on all the foreclosed houses, causing house prices to plummet. this'll be a looong time coming. All those doofuses who treated their home like it was a credit card will get their comeuppance. LIVE WITHIN YOUR MEANS.
Q. How does the first-time homebuyer credit differ for homes purchased in 2009 and 2010 compared to the credit for homes purchased in 2008?
A. First-time homebuyers who purchased new homes in 2008, subject to certain criteria, were eligible for a maximum credit of $7,500, which must be repaid over a 15-year period.
Eligibility for the credit and the amount of the available credit for new homes purchased in 2009 were subject to a variety of changing rules depending upon when the home was purchased. First-time homebuyers who purchased new homes in 2009, subject to certain criteria, were eligible for a maximum credit of $8,000, which does not have to be repaid. Long-time residents who purchased homes after November 6, 2009, subject to certain criteria, were eligible for a maximum credit of $6,500, which does not have to be repaid. First-time homebuyers and long-time residents who purchase new homes in 2010 before May 1, 2010, subject to certain criteria, are eligible for a maximum credit of $8,000 or $6,500, respectively, which does not have to be repaid.
The credit for home purchases made in 2008 should be claimed on 2008 tax returns. The credit for purchases made in 2009 can be claimed on either the 2008 or 2009 tax return. The credit for homes purchased in 2010 can be claimed on either the 2009 or 2010 tax return. (1/27/10)
Doesn't look like anyone gets a check cut to them like you claim. Nope, looks like it is all paper money credited based on tax returns.
This idea that the Fed cuts a check to cover the $8,000 is kinda out there.
omnomnom, I agree. We should not reward poor choices and punish good planners.
I think we should do away with the mortgage interest deduction.. or either just have a housing deduction.
My problem with the whole cash for clunkers & first time home buyer tax credits is that they target only select people, whether they pay taxes or not.
If you do not pay federal taxes due to your low income and you got a first time home buyer tax credit or cash for clunkers money, that is welfare. Disguised welfare but welfare nonetheless. They took it from me and gave it to someone who does not pay taxes.
I believe that if you are going to give tax breaks, give them to everyone who actually pay taxes (i.e. income tax reduction, property tax reduction, sales tax reduction, whatever....).
That's the way to stimulate the economy.
Brad, a wise man once said "Hell is a place with no reason." Thank you for bringing me to that place, Brad. There is no way whatsoever I can convey that information to you in plain English.
No where did I claim people receiving the Home Buyers credit "Got a check cut to them." What I AM SAYING, IS THAT A FRIGGIN STIMULOUS BILL IS WHAT IS GOING TO PAY PAY FOR IT!!!!
Please, stop claiming I am saying things that I am not.
I am at a complete loss for words right now. The best that I can do is allow you to live in whatever world it is that you live in.
" a 40-50% cut in federal & state government spending." Let's see Social Security, Medicare, interest on the debt, veterans affairs, defense, and homeland security make up 57% of the budget. Exactly where to you propose to make the 40%-50% cuts?
Has Countyman read this story yet? I wonder how he accounts for this- when just a few months ago he was talking about the big demand for houses in Augusta.
Countyman, is Augusta still booming?
No one mentions the new credit requirements. I remember well when a 550 would get you in a home. I also remember how sales dropped like a pinball when the required scores went up. Now you don't get into a home unless your really qualify, which means there were a lot of real estate people who promoted sales to people who actually weren't 'good for the money'. But Oh, the commissions, if you could get them to the signing table.
Cutting taxes and spending is appropriate and justified. Issuing tax credits (using tax money as a reward for buying a new home) is unwarranted and should be illegal. Basically, taxpayers are helping a few by paying $8,000.00 towards the purchase of their new home. Instead, taxes should be lowered for all and spending should be GREATLY reduced and entitlement programs eliminated completly. Government doesn't have any money to spend or give in the form of a tax credit that it doesn't TAKE from another hard working American through taxation.
Curly. While you are off to work start thinking about how many millionaires don't like the "fair tax". They aren't for it just to satisfy working stiffs. BTW what are they going to do about state income and sales taxes which aren't covered under the so called "fair tax".
Did I miss something or didn't GM just finish paying off their loans to the government? And how were they able to do that and keep from declaring bankruptcy? What program allowed them and americans to purchase cars are reduced rates? How many hundreds of thousands would have been put out to pasture if GM had failed? Now tell me cash for clunkers was a dismal failure. And heck we have been selecting segments of society for home buying credit for years, just to be patriotic and politically correct. What about the first time teachers loans, reduced farm loans, loans for police officers and first time Washington D.C. loans? This is not something new.
Diss, do a little research on where GM is getting the money to pay back the loans. I am so laughing out loud.
The Augusta Chronicle ©2012. All Rights Reserved.
