PORT ANGELES — For Galen Hammond, the $8,000 tax credit for first-time homebuyers made all the difference.
Hammond, 27, got the keys to his Port Angeles home on Nov. 6 — the same day the federal incentive was extended from Dec. 1 to April 30.
“It was something we were ready to do,” said Hammond, who co-owns a Port Angeles restaurant with his wife, Noi Chaummalang.
“With all the good deals, we were going take advantage of it.”
Since the young couple didn’t have a lot saved up for a down payment, they tried repeatedly before securing a U.S. Department of Housing and Urban Development — or HUD — loan.
Lenders are very careful these days, Hammond said, but his persistence — and favorable debt-to-income ratio — ultimately paid off.
Asked if the tax credit played a role in their decision to buy a home, Hammond said: “Definitely. It made it possible.”
Others are taking advantage, too.
Dan Gase, president of Coldwell Banker Uptown Realty in Port Angeles, said the tax credit has been good for business and good for buyers.
In attempting to quantify the impact it has made, Gase and his colleagues on Friday estimated first-time home-buyers are accounting for a quarter of their sales.
“We’re thinking at least 20 percent, maybe 25 percent,” Gase said.
Daphne Eshom, president of the Port Angeles Association of Realtors and Jace The Real Estate Company realtor, couldn’t estimate the direct effect, but said: “I think it’s helped greatly.”
“I think the fact they extended it is a real boon to the real estate market and the real estate industry,” Eshom said.
The Washington Association of Realtors sponsored the first-ever statewide open house from June 27 to July 28. That event attracted many first-time home-buyers, and it’s likely to be held again next year, Eshom said.
“It’s a big, big help, especially to young people who don’t have a lot of money,” she said. “I’m very grateful they extended it.”
Bill Humphrey, an associate broker for John L. Scott Real Estate in Sequim who serves as the president of the Sequim Association of Realtors, said, “My understanding is that the tax credit has been very helpful,” and that “the extension has been a blessing.”
To qualify for the expanded tax credit, a prospective homeowner must sign a contract before April 30 and close by June 30. Income limits were raised to $125,000 for single buyers and $225,000 for a married couple.
Part of the extended tax credit includes a $6,500 credit for someone owning a home for five-consecutive years out of the past eight.
“That’s really nice,” Gase said. “It opens up a whole aspect of the market we haven’t really seen a lot of motivation from. This might really make a difference.”
The $6,500 tax credit for previous home owners kicks in on Dec. 1.
Home sales countrywide in Clallam County jumped 31 percent in the third quarter of 2009 from the second quarter of the year, the Washington Center for Real Estate Research said Tuesday.
The research center’s third-quarter report also shows a 12 percent increase in Clallam County sales from the same quarter in 2008.
Clallam County outperformed the state’s third-quarter increase — 15.6 percent — in seasonally-adjusted resales, according to the Washington State University-based research center, which gleans figures from the countywide Northwest Multiple Listing Service.
The Olympic Listing Service, which covers only Port Angeles and Sequim, showed a slight decrease in home sales this year.
Doc Reiss, associate broker at Windermere Real Estate in Port Angeles, said the Olympic Listing Service showed 477 home sales for the first three quarters of 2009 compared to 546 for the first three quarters of last year in central and eastern Clallam County.
Sales were flat in Port Angeles with 222 from January though September of this year and 232 over the same time in 2008.
Humphrey said he hadn’t seen the data and could speak only for himself, not the Sequim Association of Realtors.
But he said that, “We tend to believe Olympic Listing Service more accurate for Sequim and Port Angeles, because it’s more current for our area.”
In Jefferson County, in the past six months through Nov. 13, Susan Miller, president of the Jefferson County Association of Realtors, says 92 homes have been sold around Jefferson County, compared to 141 during the same period last year.
Of those homes sold in the past six months through Nov. 13, Miller said nine were bank foreclosure sales, compared to 18 foreclosure sales during the same period last year.
Although the tax credit for first-time buyers has helped, the number of foreclosures on the market has had an impact, said both Reiss and Humphrey.
Clallam County is seeing a spike in repossessions, a handful of which can skew statistics in a small county, Reiss said.
“It doesn’t take a whole lot to have a major impact on our inventory,” said Reiss, who publishes a weekly newsletter on the Port Angeles real estate market.
Humphrey said that one goal of the tax credit was to prompt benefits to “trickle up,” allowing people who sold their homes to first-time buyers to then purchase other homes.
“What’s happened is, because there’s a lot of foreclosures on the market right now, a lot of those people who can get in are buying foreclosed homes, so people who lost their homes can’t go out and buy another home,” he said.
“The whole idea of ‘trickle up’ is sort of thwarted,” Humphrey said.
Sales of foreclosured homes can be further complicated by agents having to go through banks as the seller, rather than an individual.
Banks tend to take longer to close than individual sellers, Humphrey said.
A sale usually closes within and 30-to-60-day period, he said, but sales of repossessed property tends to take “between three and six months — or even eight months — to close.”
That can be a problem for a buyer whose loan is time-sensitive, and who may not be able to wait for approval of the sale.
“That’s why it was so beneficial to get the government to extend [the tax credit deadline] and allow the first-time homebuyer more time,” Humphrey said.
The longer closure period also may mean that sales in the pipeline, with everything done but the final approval, have not been reported.
Still, agents such as Reiss believe the tax incentive for first-time home buyers is keeping the market healthy.
Reiss has sold homes to five first-time home buyers this year, including the Hammonds.
“With the economic turmoil this year, I think it’s a pretty good indication that something is driving this market,” Reiss said.
Port Angeles Windermere realtor Kelly Johnson hasn’t noticed much of a change in sales to first-time home owners.
About a quarter of her sales were to first-time home owners in each of the past two years.
“I haven’t had a big influx, personally,” Johnson said.
Johnson and Reiss said now is a good time for new home owners because of extra incentives and the availability of entry-level homes.
The median home price in Clallam County is $218,700, according to the Washington Center for Real Estate Research
In Jefferson County, the tax credit for first-time home buyers, and the extension, spurred sales that otherwise might not have happened, said Miller, associate broker with Windermere Real Estate/Port Townsend, who sees signs of recovery.
With prices the lowest in many years and home mortgage interest rates in the 4 percent range, homes are still being sold — even expensive waterfront homes, she said.
There are 504 active residential listings in Jefferson County, with 183 contingent or pending sales during the past six months. Four out of the 41 pending sales are foreclosures with 13 out of 138 actual sales listed as foreclosures.
During the past six months, 117 of the active listings are priced below the $261,000 median sales price.
Of the active listings, 387 are above the median sales price.
Cheri Brennan of Northwest Multiple Listing Service, said the median price of a Jefferson County home or condominium in September fell by 13.52 percent compared to September a years ago.
The median price in September 2008 home and condominium sales was $265,950 compared to $230,000 in September this year. Compared to that, June sales closed at a median of $210,000 compared to $289,000 in June 2008.
There was a 27.34 percent decline in median price in June 2008 compared to June this year.
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Reporter Rob Ollikainen can be reached at 360-417-3537 or at rob.ollikainen@peninsuladailynews.com.
Port Townsend-Jefferson County Editor Jeff Chew contributed to this story.