Home sales fall in wake of tax credit expiration

Home sales in the Corridor were sharply lower in October than in the same month of 2009, reflecting the impact of a defunct federal tax credit that temporarily boosted sales.

A total of 296 homes were sold last month in Cedar Rapids, down 34.2 percent from 450 sold in October 2009, according to the Cedar Rapids Area Association of Realtors. The average sale price was $155,328 in October, slightly lower than $155,712 recorded in the same month of 2009.

On a year-to-date basis, 3,283 homes were sold in the first 10 months of 2010, down 1.1 percent from 3,321 in the same period last year. The average sale price so far in 2010 is $154,289, up 1.9 percent from $151,215 in the January-through-October period of 2009.

At the southern end of the Corridor, 127 homes were sold last month, according to the Iowa City Area Association of Realtors, down 24.4 percent from 168 homes that were sold in October 2009. The average sale price was $191,442 in October, up 4.3 percent from $183,279 in October 2009.

On a year-to-date basis, 1,993 homes have been sold in Iowa City, Coralville and surrounding communities, down 3.5 percent from 2,066 in the first 10 months of 2009. The average sale price so far in 2010 is $178,118, down 2.6 percent from $182,294 in the same period of 2009.

Home sales by owners fell 43.2 percent to 25 in October from 44 in the same month last year, according to IAHomesForSale.com. The average sale price rose 7.6 percent from $142,065 in October 2009 to $153,681 last month.

Statewide, the number of homes sold fell 28.9 percent from 2,992 in October 2009 to 2,127 last month, according to the Iowa Association of Realtors. The average sale price edged up 0.4 percent in October to $136,682 from $136,146 in October 2009.

Kurt Schade, president of the Iowa Association of Realtor, said 11 local Realtor associations reported increases in the number of homes sold last month and 20 recorded declines.

“We've seen activity taper off slightly this fall, as it's taking a little while for the market to even out following high activity earlier in the year,” Schade said. “Despite some of the current challenges in the market today, there are still some good opportunities as well, including record low mortgage rates, many homes on the market and steady prices.”

The federal tax credit of up to $8,000 brought in many first-time homebuyers, which inflated monthly sales statistics. The expiration of the tax credit in the spring led to correspondingly lower home sales.