So Far, So Good

A walk-through was the last step before Quinn and Michael Povilaitis would close on the purchase of a cozy two-story home in Hanahan.

Even then, she was anxious to move into the Charleston single home in the intimate South Cove neighborhood, where most houses are priced in the $190,000s to low $200,000s.

The couple had endured a lengthy cold spell where they lived in Oklahoma. He’s a C-17 pilot transferred to Charleston Air Force Base, which will be a short drive from the 1,880-square-foot house off Foster Creek Road.

“I’m ready to be here in warm weather,” Quinn says.

But the Povilaitis’ are excited for another reason. They’re first-time homebuyers. And this year the husband and wife will benefit not only from living in their own abode but also from a special $8,000 federal tax credit.

The program started last year and proved so popular that the government extended it from the original Nov. 30, 2009, deadline. In addition, Congress added a $6,500 credit for repeat buyers.

The couple, who researched the local market and tax credit eligibility, started house shopping last fall. Eastwood Homes, their builder, agreed to include the credit whenever they closed, even if it was after the original deadline. In the end, the program was extended.

Taking a short break on the final look-see, Quinn says the $8,000 would be put toward reducing the mortgage costs and buying furniture. “It will be a help.”

The couple are among hundreds of families buying or selling residences in the Charleston area in the past few months. Observers cite the credits, designed to stimulate housing markets to pull the industry out of a two-year slump.

Statistics are trickling out that may back up the anecdotal evidence. Rocky Mount, N.C.-based think tank Market Opportunity Research Enterprises found that greater Charleston home sales rose 21 percent in fourth quarter 2009 from a year earlier.

And based on preliminary figures from the Charleston Trident Association of Realtors (CTAR), 416 homes sold in the Berkeley, Dorchester and Charleston counties in January. The median – or midpoint – price was $193,500.

“It’s clear that in terms of median home prices, we’re heading in the right direction,” says Jeremy Willits, senior vice president with Grubb & Ellis WRS and 2010 CTAR president. “While we don’t expect median prices will make huge gains this year, they should remain relatively stable as we work our way through an inventory that is still larger than usual.”

There were 9,171 homes actively listed for sale with the Charleston Trident Multiple Listing Service in January, compared with 10,636 a year earlier. That’s a sign that the inventory is shrinking.

Tax credits “did help get people off the fence,” Willits says. The group has noticed sales increases, “particularly on the low (price) end,” he says.

Yet even with the recent complementary findings, there’s no consensus on whether the program is successful. In fact, figuring out the effectiveness of the program has been somewhat analogous to judging a boxing match.

Ding! Round one: federal legislation gives first time homeowners until Nov. 30, 2009, to close on a sale and receive a $8,000 tax credit.

The outcome: the edge goes to homebuyers, who seem to have boosted sales in the Charleston area and elsewhere, particularly in the month of the deadline and among purchasers of homes at or below $200,000.

Ding! Second round: the government extends the $8,000 first-time homebuyer credit. Buyers must have a binding contract by April 30 and must close by July 1. Also, existing homeowners who have lived in their current home five years or longer get a $6,500 credit if they line up a contract to buy a new home by the end of April and close by July 1.

The outcome: up in the air, although local Realtors favor the credits and believe they are stimulating interest if not always sales.

Will there be a bell for round three? Local real estate trackers figure it’s unlikely that Congress would again extend the credits. They do agree that now is the time to buy, at least to meet the current deadline.

"We've seen a significant increase in traffic and sales as people know that this is the end of the road regarding the tax credit...it won't be extended again," says Jason Esposito, Charleston division sales manager for Eastwood Homes.

"The housing market locally is in rebound mode with the expected wave of jobs headed this way over the next 12-24 months," he says.

Eastwood Homes still can build homes in its five Charleston area communities so buyers close before the deadline as well as having various homes under construction that will qualify for the tax credit, Esposito says.

“I think it stimulated first-time homebuyers,” says Pam Bishop, Realtor with Carolina One Real Estate who represented the Povilaitis’ in their home purchase.

Bishop says the credits have bolstered the sales market of homes trading for $500,000 or less, which is considered the lower-cost segment.

“It’s the lower end that (the credits are) affecting,” she says. “Most people who are buying in the higher end, it’s not quite the same.”

Reach Jim Parker at 937-5542 or jparker@postandcourier.com

HOUSING UPTICK

Here’s a look at the Charleston area market for home sales and prices in the October through December quarter of 2009 and for the year as a whole compared with the same time frames in 2008.

Charleston area (includes Berkeley, Dorchester, Charleston counties):

Total sales 4Q ’09: 2,805

Total sales 4Q ’08: 2,319

Change: up 21 percent

Average price 4Q ’09: $261,553

Average price 4Q ’08: $280,374

Change: down 7 percent

Total sales 2009: 9,502

Total sales 2008: 11,544

Change: down 18 percent

Average price 2009: $269,175

Average price 2008: $303,195

Change: down 11 percent

Source: Market Opportunity Research Enterprises