Rates, tax credit may prod marketBY BILL WILSON
The Wichita Eagle
Tuesday's dose of snow and ice marked the traditional end of the yearly home-selling season.
Or did it? Bankers and brokers think that two unique variables — the extension and expansion of the homebuyer tax credit through June 2010, and continued low mortgage rates — could keep buyers and sellers active this winter.
And a busy winter is needed, with anecdotal evidence that November was slower than anticipated after a fall market rebound. Historically, the Wichita home market freezes up during winter as buyers stay home and sellers aren't motivated to sell.
"We think that the two variables will keep interest in real estate steady through the slow season," said John McKenzie, president of Wichita's Coldwell Banker Plaza Real Estate.
"After all, the window for this (tax credit) opportunity will not last past June of next year."
Stan Longhofer, the economist who heads the Wichita State Center for Real Estate, agrees.
"We don't expect to traditionally see the sales in December and January that we do in May and June and that's true again this year," he said.
"But I'd expect you'll see sales up slightly this year on a seasonally-adjusted basis, or at least not declining at previous rates."
With 30-year fixed rates hovering around 5 percent in Wichita, and 15-year fixed rates at about 4.4 percent, that would be enough in a normal economy to keep the market flush with buyers, said Dan Jones, regional lending manager for Capitol Federal Savings.
Factor in the extension of the $8,000 first-time homebuyer tax credit and its expansion to $6,500 for owners who've lived in the same house for at least five years, and there's hope the market won't flatline this winter.
"Certainly, it appears to us that bigger than the $8,000 credit is the $6,500," said Willie Kihle, president of Prudential Dinning-Beard Realtors in Wichita.
"It applies to a great deal more people than the first-time homebuyer credit. It won't have a big impact on December, but it could after the first of the year."
Jones said the expanded credit and the interest rates, together, could keep the Wichita winter market busier than normal.
But these are uncharted waters for the local housing market, he said.
"Everyone's still pretty uncertain about what to expect," Jones said. "It seems different this time. The layoffs have been bigger than in the past and the depth of the economy seems a little broader in many respects. I don't know that we have any history to draw upon."
Kihle hopes Jones is right, because the local home sales momentum appears to have slowed in November after perking back up — driven by the first-time homebuyer tax credit — earlier in the fall.
"We thought it was going to be much better, but it wasn't nearly as good as we had hoped," he said.
"I think the next 30 days could be a little difficult," Jones said. "Most people are focused on the holidays. But about the second week in January, hopefully the business picks up."Reach Bill Wilson at 316-268-6290 or firstname.lastname@example.org.
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