Existing Home Sales Post Surprising 5.1% Gain

Sales activity remains slow, but plunging prices draw in first-time buyers
updated 11:14 a.m. PT, Mon., March. 23, 2009

WASHINGTON - Sales of previously occupied homes jumped unexpectedly in February by the largest amount in nearly six years as first-time buyers took advantage of deep discounts on foreclosures and other distressed properties.
Economists said sales, while still extremely slow, may finally be coming back to life after declining sharply following the stock market plunge last autumn.
Prices, however, are expected to keep falling well into the year. Tens of thousands of homes reman tied up in the foreclosure process and are not yet for sale. Plus, as the recession deepens and job losses mount, many buyers are likely to stay on the sidelines.

“The four-letter word in the housing market is 'jobs,'’ said Nicolas Retsinas, director of Harvard University’s Joint Center for Housing Studies. “If you’re worried about having a job tomorrow, you’re not likely to buy a home now.”

It was the largest monthly sales jump since July 2003, with first-time buyers accounting for about half of all transactions, according the data released Monday. Sales had been expected to dip to an annual pace of 4.45 million units, according to Thomson Reuters. The results, which came after a steep decline in January, mean that sales activity has returned to December’s levels, but still remains lower than most of last year.

The sales figures don’t yet reflect the new $8,000 tax credit designed to lure even more first-time buyers into the market. That should juice up early summer sales, but how much will depend on the overall condition of the U.S. economy.
Full article available:http://www.msnbc.msn.com/id/29836196/from/ET/

TAX CREDITS: As listed above, in its efforts to stimulate the economy and revive the housing market, Congress has enacted legislation providing a tax credit of up to $8,000 for
first-time home buyers.

CA Home Buyer 10000 Tax Credit, entitled on new homes brought between March 1, 2009 and March 1, 2010 (must be new construction to meet the minimum requirements).

City of Los Angeles Housing Department (LAHD) will offer purchase assistance financing to
eligible low- and moderate-income homebuyers seeking to purchase a foreclosed home in an NSP Priority Area in the City of Los Angeles.