Incentive boosts home buying in Sept.

First-time home buyers rushing to take advantage of the federal tax credit continued to drive sales of existing homes in South Hampton Roads last month, according to a report released Friday.

Real Estate Information Network Inc. released data showing that 1,082 homes in the region sold in September. Although it rose just 3.7 percent from August, the sales activity last month was 28 percent higher than a year ago, the Virginia Beach-based multiple listing service reported.

September's was the biggest year-over-year gain this year and the fourth month of such increases since home sales volume turned positive in June.

"There's one thing driving sales: the expiration of the federal tax credit," said Dorcas Helfant-Browning, CEO and managing partner of Coldwell Banker Professional, Realtors. "Normally we see a softening in September. That's a seasonal adjustment. People are getting adjusted to the school year, and that takes your mind off buying a home."

In 2007 and 2008, the August-to-September decline in home sales was 18 percent or more.

Even so, as home sales volume remained high, prices fell last month, most likely pushed lower by sales of foreclosures and strong buying activity in the market's lower price range.

The median price for an existing home in September was $210,000, down 6.7 percent from August and 4.1 percent from a year earlier.

The median is the point at which half the prices are higher and half are lower.

The $8,000 tax credit, which is offered to first-time homebuyers and those who haven't owned a home in three years, is likely to buoy sales through the next couple months, said Vinod B. Agarwal, an economist at Old Dominion University. Homebuyers must close on a new home by Nov. 30 to qualify for the credit.

Agarwal also attributed the sales volume to the large number of foreclosures lenders are pushing onto the market.

At this point, buyers who haven't already signed a contract on a home are probably too late, Helfant-Browning said. "We're working on getting this tax credit renewed so we can continue to eat this inventory caused by foreclosures and overbuilding."

The report also showed that the number of homes on the market last month in Hampton Roads fell slightly. In September, there were 14,029 homes on the market. Meanwhile, the average time on the market for existing homes in Hampton Roads also fell to 82 days last month, compared with 86 days at the same point last year.

The inventory and market time figures include the Peninsula and outlying regions such as Williamsburg and northeastern North Carolina.

Josh Brown, (757) 446-2318, josh.brown@pilotonline.com