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Nov 08, 2009 (The Lewiston Morning Tribune - McClatchy-Tribune Information Services via COMTEX) -- Sales of homes rebounded in the second half of 2009 in the Lewiston-Clarkston Valley and surrounding communities, buoyed by a $8,000 tax credit for first-time buyers.

Single-family residences moved most briskly in July, with 77 homes selling in the traditionally strong month, according to statistics from the Lewis Clark Association of Realtors. And activity remained more robust in August, September and October than it had been earlier in the year. An average of about 60 homes sold in each of those months.

That compares with January and February, when only 23 and 29 houses sold, respectively.

The biggest reason for the uptick is the federal tax credit for first-time home buyers, says Glenn Crellin, director for the Washington Center for Real Estate Research at Washington State University in Pullman.

That credit, which was scheduled to expire at the end of November, has been extended through April. An additional credit of $6,500 has been added for buyers who have lived in their current homes for at least five years. It's good for homes that cost $800,000 or less and can't be used on vacation or rental properties.

Crellin surveyed real estate agents early in the fall asking about third-quarter sales. Throughout Washington, including Asotin County, about one-third of the sales were due solely to the tax credit and that volume corresponded with the increase in the volume of sales, Crellin says.

Crellin believes the trend was similar in Nez Perce County because of its proximity to Washington, but his study didn't extend into Idaho.

Home sales peaked in Washington in 2005 and then started to fall. In the fourth quarter of 2007, prices for Washington homes began to deflate and that trend is continuing, Crellin says.

The average sale price of a home in the Lewiston-Clarkston Valley was $162,149 in the last six months compared with $176,880 last year for about the same period, according to figures from the Realtors group.

The tax credit has created isolated instances where agents are getting multiple offers for the entry-level homes first-time buyers are acquiring, Crellin says.

Generally, demand is high for lower-priced homes of less than $150,000 and fewer of them are available. But a number of homes are languishing at the upper end of the market where homes are priced at more than $250,000, Crellin says.

A challenge in the market for high-end homes is that the inventory of them could sustain the demand for 18 months to three years, Crellin says. "The top of the market is going to continue to show price weakness for some time."

The $6,500 tax credit for existing home owners is unlikely to change that dynamic much because someone who can afford a home that costs more than $250,000 is not likely to be sweating that small amount of money, Crellin says.

But that doesn't mean the $6,500 won't help, Crellin says. Sellers of starter homes will likely use the $6,500 to make a moderate step up into a home that costs between $150,000 and $250,000, Crellin says.

Like Crellin, Dan Lantz believes the home-buyer credit created sales, but he guesses it accounted for about 10 percent to 20 percent of the volume at the agency he manages, Century 21 Beutler and Associates in Lewiston.

Another factor in homes moving again has to do with the numerous buyers with financing or cash in hand, Lantz says.

Many house hunters who were previously waiting on the sidelines are convinced the market has bottomed out and are now purchasing, Lantz says.

At the same time, baby boomers who are Lewiston-Clarkston natives are continuing to return to retire here in numbers larger than Lantz has seen in his 28 years in real estate.

One of the draws is that real estate prices have proven to be stable, Lantz says.

Prices here have fallen, but not nearly as dramatically as in places such as Boise, where some houses previously worth $300,000 can now be purchased for $160,000, Lantz says.

Williams may be contacted at ewilliam@lmtribune.com or (208) 848-2261.

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Elaine Williams

Copyright (C) 2009, The Lewiston Morning Tribune, Idaho

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