The suddenly surging Columbia housing market just might have gotten more juice.
The tax credit that helped fuel the Midlands' first year-over-year homes sales gain in more than two years got extended and expanded by Congress on Thursday.
Now most anyone who wants to buy a home can get a bonus from Uncle Sam if they put a contract on a house before May.
Area real estate experts say the help already on the books from Washington - an $8,000 tax credit for first-time buyers -spurred a 21 percent jump in October home sales, compared to a year earlier.
This was after a 2.4 percent sales increase in September, according to industry data. Now the Midlands has had back-to-back home sales increases after 25 consecutive months of decline.
The first-time buyers credit was set to end Nov. 30. Now Congress has extended that offer and tacked on a $6,500 credit for folks who have owned their homes for at least five years. The bill was sent to President Barack Obama after the House approved it Thursday.
The expanded credit could keep a recovery going through the winter, typically a slow selling season, experts said.
It also could get more buyers for homes that aren't the lowest priced. Homes under $150,000 have fared well with first-time buyers, but adding existing homeowners might boost sales of homes into the $200,000s.
But all that depends on getting homeowners to move in a shaky economy where layoffs and pay cuts continue and getting potential buyers through a tight credit market where qualifying for loans is tougher than in the past years.
Some experts warn that the government help is a temporary fix in the state's bleak economic picture.
Lending standards and unemployment rates will have to improve to get South Carolina into a long-term recovery, said Brian Boyer, vice president of real estate development for Inspired Communities in Columbia. South Carolina has the nation's fifth-worst jobless rate.
"That's just one piece of the puzzle," Boyer said of the home buyer tax credits.
Nearly 22,000 home buyers have taken advantage of the tax credit so far in South Carolina, according to Internal Revenue Service figures.
Some doubts have been raised about the effectiveness of the credits. Some economists have said that fewer than a third of people claiming the credit nationwide are believed to have bought their homes because of the tax credit.
But Columbia-area real estate professionals say the credit has been a driving force for home sales in this area.
Boyer, whose company caters to first-time home buyers, said 9 out of 10 of his buyers in the past few months have been motivated by the tax credit. He said his sales have risen about 25 percent during that time.
But a $6,500 credit might not get existing homeowners eager to buy, some agents said.
"A lot of them are staying put because the economy is still a little shaky," said Rana Peri Davis, an agent with Coldwell Banker United, Realtors.
She said 90 percent of her business right now is from first-time buyers, compared with 65 percent three years ago.
Davis said she would expect business to pick up even more after the first of the year, when people start using their income tax refunds to help with down payments, typically the biggest obstacle for first-time buyers.
The current tax credit for first-time buyers has bolstered sales mainly in the lower-priced homes - those costing $150,000 and under, Coastal Carolina University economist Don Schunk said.
While the expanded credit could help the $150,000 to $250,000 market, Schunk said sales of higher-end homes aren't as likely to spike.
"It's something that can only benefit both low-end and medium-range properties . . . in the short term," he said.
But a sustainable recovery - one where home sales rise consistently - will not begin until the need for government help ends, Schunk said.
"We need to get to a point where people are buying a home not because of an $8,000 tax credit," he said, "but because people are comfortable with their jobs, comfortable with their income and they have money saved up for a down payment."