Home sales up 15 percent in January

Home sales were strong in January in most of South Carolina, buoyed by federal tax credits for home buyers.

Sales rose 15 percent in January, compared with a year earlier, according to a report Tuesday from the S.C. Realtors trade group.

But sales have cooled in the Columbia market, dropping 3.7 percent in January, compared with a year earlier, after four straight months of gains. The Greenwood and Sumter areas also saw declines.

Sales were strongest along the S.C. coast, which had taken the biggest hit as sales declined in 2008 and 2009. Sales rose 104 percent in Hilton Head and 50 percent in the Myrtle Beach area.

Median price statewide was $140,000, up 7.2 percent from January 2008.

Nationwide, home prices also climbed in December, according to a report out Tuesday from the Standard & Poor's/Case-Shiller 20-city home price index. Prices rose 0.3 percent from November to December, the seventh-straight monthly gain.

In the Columbia area, 362 homes sold in January, compared with 376 in January 2009 and 633 in 2008. Median price of homes sold was $138,000, up 2.2 percent from last January.

Buyers rushed to take advantage of an $8,000 tax credit that was set to expire in November.

Congress later extended and expanded the tax credit, giving buyers until the end of April to get a home under contract. Sales are expected to shoot back up in the Midlands as that deadline nears.

Other positive signs in the Midlands and across the state:

- Builders took out 81 percent more home building permits in January in the Columbia area than in the previous year, according to the Home Builders Association of Greater Columbia. Permits started rising steadily in September as inventory shrunk and buyers prepared to take advantage of the tax credits.

- The number of homeowners entering foreclosure in South Carolina was down slightly in the fourth quarter of 2009, the latest figures available from the Mortgage Bankers Association. The number of loans in foreclosure or more than 30 days late was up less than a percentage point in the state, but was still lower than the national average.

The slight setback in home sales in Columbia could be seasonal, SCBT senior vice president Leslie Francis said.

"Who wants to go out and look at houses when it's 20 degrees?" she said.

Francis said sales likely will rise in the coming months as the final deadline approaches for the tax credits and the typical spring home selling season gears up.

But real estate experts do not expect hefty increases in home sales because many of the buyers who were on the fence bought homes as the first deadline approached.

"Everybody thought it was going to end, so a lot of those people went ahead and took the plunge," Columbia real estate agent Jay Graham said. "How many are left over to buy during the second batch? It probably won't be as much."

In the long run, the tax credit could cause a longer recovery, Graham said, because people who would have waited until this year bought homes in 2009.

"Our real test is going to come at the end of April," he said.

A recovery will depend on interest rates staying under 6 percent and an improvement in South Carolina's unemployment rate, which is the fifth-highest in the nation, said Larry Crossett, owner of MaxM Realty.

"We still hear every day of folks losing their jobs," he said. "They're not going to buy a house if they don't have a job."

With interest rates, which have been at historic lows for months, there is some wiggle room, Crossett said. Rates have been below 5 percent, and he said they could go up a full percentage point without having too much of an impact on buyers.

Overall, the economy - and real estate market - is due for a rebound, Crossett said.

"If you look at the last two to three years, it's time," he said.