BANGOR, Maine — Leaders from two of the city’s real estate companies and a local mortgage company say that after months of struggling, the local housing market is beginning to turn around.
An $8,000 first-time homebuyers tax credit, record low interest rates and a good number of homes on the market are spurring people to buy, they say.
“I think the stars just lined up right in terms of the interest rates bottoming out and the consumer focus on the first-time homebuyer’s tax credit,” Jon Dawson, president of ERA Dawson Bradford Co. of Bangor, said Thursday. “The impact is statewide.”
According to figures provided by Dawson from the Maine Real Estate Information System, there were 25.8 percent more home sales during May in Penobscot County than during the same month a year ago. That is drastically different from figures provided by the group in April, which showed single-family homes sales statewide 14 percent lower than in 2008, and 15.4 percent lower in Penobscot County.
“It was terrible,” Dawson, a 35-year real estate veteran, said of the market.
Cathy Libby, operations manager for the Maine Real Estate Information System Inc., which is owned by the Maine Association of Realtors, said the official figures for May would not be released until June 23.
Russ Harrington, vice president of Town & County in Bangor, said his company has seen a vast improvement in the number of customers in the last four to six weeks.
“We’re seeing a lot more buyers jump in the market and especially first-time homebuyers,” he said. “I have never seen better opportunities for first-time buyers. If they are not buying now they are probably missing a once-in-a-lifetime chance.”
First-time home buyers who buy or bought a home between Jan. 1 and Dec. 1 of this year are eligible for a tax credit of 10 percent of the value of the home — up to $8,000 — and they don’t have to pay it back.
The federal government is giving money to those who invest in a residence for themselves and live there for at least three years.
The 2009 tax credits will reduce the amount of income taxes owed or will result in a refund for those who owe less than the credit they receive.
First-time homebuyers are defined as anyone who has not owned a home in the last three years. If the home is sold within three years of purchase, the entire amount of the credit is recaptured during the sale.
In addition to the federal incentive, the Maine State Housing Authority announced Thursday that it is offering grants of up to $5,000 for first-time homebuyers to use toward the down payment or post-closing costs. Eligible homeowners also can receive a $500 coupon for a home energy audit.
Another factor attracting homebuyers is interest rates are hovering between 5 and 6 percent, said Jon Hutchins, senior loan officer for First Choice Mortgage of Brewer.
“They are great interest rates,” he said, adding, “There is a lot more purchasing going on.” The tax credit “definitely has sparked a whole wave of first-time homebuyers. Eight thousand [dollars] is a lot of money to pass up.”
Home sales are a good indicator that the economy is improving, Hutchins said.
“I think it all starts with housing,” he said.
Harrington, who has worked in the real estate business for 30 years, agreed.
“I think we’re beginning to see the first signs of this improving,” he said. “It’s the very early stages of what we’re optimistically hoping is a recovery.”