Federal tax incentive gives Snohomish County home sales a nice bump

Home sales soared in Snohomish County last month as buyers tried to beat the upcoming deadline for a federal tax break or to invest thanks to prices they haven’t seen in five to six years.

There were 865 homes sold in the county in March, a 68 percent increase from a year ago. Pending sales in the county, meaning the deals were signed in March but not closed, rose 77 percent from last year, the highest in the Puget Sound area.

“It was absolutely amazing,” said Diedre Haines, regional managing broker for Coldwell Banker Bain in Snohomish County.

Haines said her three offices and 75 agents sold a total of 150 properties last month, breaking their monthly sales record set in May 2001 of 114 transactions.

Haines said a lot of the sales were sparked by people trying to meet the deadline to qualify for either an $8,000 tax credit for first-time buyers or a $6,500 credit for people buying a different home. To qualify, buyers need to sign a contract by the end of this month.

“The Seattle surge has returned thanks to the opportunities that have been afforded to homeowners through the federal tax credit, historically low interest rates, and increased affordability,” J. Lennox Scott of John L. Scott Real Estate said in a news release.

Home prices in the county continued to fall last month. The combined median price of a single-family home and condominium in the county in March was $268,000, a 12 percent drop from a year ago, when the median was $304,950. The median now is similar to 2005 prices. Median means half the home sold for more and half sold for less.

Haines said lower prices have sparked interest not only in lower-priced homes but also in homes in the upper price brackets and in raw land by individuals and by speculators. One home in the county sold for $700,000 last month. Another sold for $3.8 million, Haines said.

“A lot of these properties are bank-owned, especially the plats (land with permits), and people are buying them,” Haines said. “Most people are going to build on them or hold onto them for two or three years down the road.”

The purchases by investors and by people interested in building later make Haines hopeful that real estate sales will continue after the tax break ends.

“I’m feeling pretty good that it probably will,” she said. “There are some good loan programs out there.”

Tim Castle of Landover Mortgage agreed that March was good for business. “It’s as good a month as we’ve had for a while,” he said.

But he wasn’t sure what to expect after the government credits end. “It’s very difficult to pick out a trend,” he said. “There are a lot of unknowns right now.”

Nationally, home sales were poor in January, but a government report issued Monday said that pending sales in February were much better than expected around the country.

The report “may signal the early stages of a second surge of home sales this spring,” said Lawrence Yun, the chief economist for the National Association of Realtors.

The Associated Press contributed to this story.

Mike Benbow: 425-339-3459, benbow@heraldnet.com.

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