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Hope for home sales

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JANESVILLE — First-quarter home sales in the area continued to fall, but local real estate agents say there’s hope on the horizon.

In fact, the Janesville office of Shorewest Realtors had more sales in March than in any of the 16 months since opening an office on Milton Avenue.

In the first quarter, 244 homes sold in Rock County. That’s down 33 percent from the first three months in 2008 and down 49 percent from the first quarter 2007.

Average and median prices also declined in the first three months of 2009.

But Jim Zanton, Shorewest’s sales manager in Janesville, believes the local tide is turning.

Zanton said falling home prices, low interest rates and an $8,000 tax credit for first-time homebuyers is spurring the turnaround.

“January was pretty slow, mainly because of the weather,” he said. “But whenever the weather broke, we had a lot of people looking. Now those people are starting to write orders.”

Zanton and Verna Saladino, an agent with Coldwell Banker Success and president of the Rock-Green Realtors Association, said the local market favors buyers.

“There’s plenty of inventory out there,” Saladino said. “The market is definitely picking up.”

Zanton said some home sellers are frustrated because they’re coming off a period where they’ve seen home values increase 30 percent on paper.

“Typically, home prices increase 2 or 3 percent a year,” he said. “If the house is priced right, it will sell, and people will still make more than they paid for the home.”

Rock County is not alone with its first-quarter declines. Counties bordering Rock also posted declines, including Dane, which usually handles economic downturns fairly well.

Nationally, sales of existing homes fell 3 percent in March.

But first-time buyers are responding to low mortgage interest rates and tax credits, the National Association of Realtors said.

According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage fell to a record low 5.00 percent in March from 5.13 percent in February. The rate was 5.97 percent in March 2008.

Zanton said more favorable rates are available locally, and banks are becoming freer with credit.

A National Association of Realtors survey in March showed first-time buyers accounted for 53 percent of national transactions, based largely on contracts offered before the $8,000 first-time homebuyer tax credit became available.

“Buyer traffic has been rising, and real estate offices are getting phone inquires about the tax credit,” said Lawrence Yun, National Association of Realtors chief economist. “By early summer, we should be seeing a positive impact on home sales from record low mortgage interest rates in addition to the stimulus provisions.”

National Association of Realtors President Charles McMillan, a Dallas-area broker, said first-time buyers are crucial at this stage of a housing recovery.

“The housing market always heals from the bottom up, and with large numbers of first-time buyers entering the market, it will become a little easier for sellers to trade up or down, according to their needs,” he said in a news release.