Sales of existing homes surged nearly 88% in Fresno County last month and could climb even more in March as homebuyers capitalize on bargain-basement prices and take advantage of new tax incentives.
"I expect to see a huge spring and summer selling season," said Alexis McGee of ForeclosureS.com, an investment and market tracking service. "Buyers have little reason to wait."
In Fresno County, 635 existing houses were sold, up 87.3% from February 2008. The buyers were responding to dropping home prices; the median in Fresno County fell to $127,750, down 46.8% from February 2008 and a 5.7% decrease from January, according to MDA DataQuick, a market-tracking service.
The combination of lower prices, ample supply, motivated sellers, low interest rates and government tax credits creates an unprecedented opportunity, said Robin Kane, a housing analyst in Fresno.
Except for those worried about losing their jobs in this severe economic downturn.
"The recession is the 800-pound gorilla in the room," Kane said. "But if you have confidence in your job, the question is, 'Why aren't you buying a house?' "
Apparently, many people are. The number of pending contracts totaled 886 last month, which is the highest number since February 2007, said Jared Martin, president of the Fresno Association of Realtors. That bodes well for March, when more than 600 of those pending sales should be completed, if the 30% cancellation rate in February holds true.
Meanwhile, the number of houses for sale in Fresno and Clovis slid from 5,092 a year ago to 3,841, a decline of 24.5%. Martin said the market is absorbing the foreclosures, "and that is what we need to arrive at a healthier market."
Three of every four homes sold are bank-owned. Lenders are capitulating, which is driving prices down, analysts said. How long they continue to fall remains to be seen. McGee said the buying spree, tax credits, bailout programs and a cut in production by builders will firm up prices.
Still, the number of foreclosures remains high, and Shannon Martin, a real estate agent in Fresno who sells bank-owned houses, said supply should remain high through this year as government relief efforts take awhile setting up.
Scott Leonard, president of Guarantee Real Estate in Fresno, said a new $8,000 federal tax credit available to first-time homebuyers is helping spark sales. Home builders are hoping a similar $10,000 tax credit available to all buyers of new houses will juice their sales. Last month, builders in Fresno County sold 104 houses, compared with 106 in January and 196 in February 2008, DataQuick reported.
"That's free money," Leonard said of the tax credits.