Maybe it’s the good prices and low interest rates. Maybe it’s factories beginning to rehire. Perhaps it’s the tax credit. Whatever the reason, home sales in Elkhart County began to rebound in November and December.

Two-hundred and fifty-seven homes were sold in December and November, according to Gary Decker, president of the Elkhart County Board of Realtors. He said sales for all of 2009 amounted to 1,495 homes, which was down 6.7 percent from 2008.

“Which is a big improvement over what it was five months ago when we were off in the 20 plus (percent) category,” he said.

Last year in November the local economy was beginning to come apart. Local recreational vehicle manufacturers had drastically cut their work forces in early and mid-2008 and by November those layoffs were beginning to drag down other local businesses that relied on the churn from those good RV salaries. In November 2008 just 85 homes were sold in Elkhart County. In November 2009 there was a marked improvement with 139 homes sold.

“So the last two months have been pretty darn good,” Decker said.

Driving forces

Decker believes that several factors are driving the home sales improvement. He said the federal government has extended the $8,000 tax credit for first-time home buyers and added a tax credit for buyers who have had a home for up to five years. Also, there are many bargains available for those wanting to buy a home.

He said in 2008 the average selling price of a home in Elkhart County was $99,867. In 2009 that average fell to $98,691.

“There are good deals out there,” he said. “(The federal tax credit) has brought a lot of first-time buyers out who may not have bought until later on.”

Barb Swartley has been selling homes for 30 years. She remembers the economic downturn in the late 1970s and early 1980s, which she said was pretty bad. “This is different than that,” she said. “This is more long-term and widespread.”

But the trend began to shift upward in the final quarter of 2009, she said.

“Our fourth quarter was certainly better than what we have had for a long time. Part of that is the tax credit,” she said. “Everyone thought that would end in November and that spurred some sales in September and October.”

Swartley said now that the credit has been extended through April, the buying spurt may continue into January and February.

“It is really a good time to buy,” she said. “If you can sell (your existing home), it is a great time to buy and move up.”

And selling an existing home is the tough part of coming up with cash for a new home.

Becker said houses in Elkhart County remained on the market longer in 2009 than 2008. He said it took 99 days of marketing on average to sell a home in 2008 and that period stretched to 111 days in 2009.

It used to take just 90 days to sell a home in Elkhart County, according to Swartley.

Back in 2006 homes were hot commodities in the county, selling in an average of 82 days, according to statistics supplied by Swartley.

But now the average days on the market is up and the average number of houses on the market is up.

“It is taking longer and prices are down,” she said.

Move-up buyers, or those who are moving to a larger house to accommodate a growing family, can still sell their homes pretty quickly, Swartley said. But senior citizens and empty-nesters seeking to sell their large homes and find a cozy place to live, are finding it harder to sell their homes.

The key to moving a house in today’s market, Swartley said, is to price it right when it first goes on the market. She tells sellers that there is a two-year glut of homes in their price range, so they have to have the best home in that range for a quick sell.

“It’s a price war and a beauty market out there,” she said. “You have to have the best house out there. This is just a very, very competitive market.”

LaGrange County

Of the 87 Indiana counties tracked by the Indiana Association of Realtors, just 23 had increased home sales in 2009. One of those counties was LaGrange.

The county is rural and has a high percentage of Amish communities. There are no large towns in the county and lake properties are abundant.

The IAR statistics show LaGrange County home sales jumped to 140 from January to November in 2009 compared to 120 in the same period of 2008.

Joy Sharp is a Realtor based in Howe. She said her sales were down in 2009 but they were better than she had expected.

Job losses hit the Amish and general populations hard in the Topeka and Middlebury areas in 2009. And that worry about employment is holding back people who want to buy homes in Sharp’s market.

“The big problem I have had this year (2009) are people are afraid to walk out on that limb because they don’t know if they are going to have a job tomorrow,” she said.

Even when some buyers make and offer on a home and get an approval for a loan, things may go sour. Sharp said she has had customers lose their jobs after they were approved for a mortgage and they can’t go through with the sale.

She said some buyers have been asking their bosses if they will have jobs in the future if they buy a home.

“A lot of bosses can’t tell you that for sure,” Sharp said.

Tax credit and mortgage rates

Sharp, Becker and Swartley all indicated the federal tax credit is helping fuel the fourth-quarter spurt in local home sales. According to the IRS, the tax credit deadline was extended from Nov. 30, 2009 to April 30, 2010. The maximum credit is $8,000 for a first-time home buyer.

The revised law allows homeowners who have lived in a home for five consecutive years of the eight-year period ending with the date of purchase of a new home, to receive up to a $6,500 credit.

For purchases made in 2010, taxpayers have the option of claiming the credit on either 2009 or 2010 tax returns, according to the IRS.

Full tax credits will be given to buyers who have modified adjusted gross incomes of $125,000 singly or $225,000 jointly. For buyers whose income is $225,000 to $245,000, the tax credit will be reduced.

Homes must be less than $800,000 to qualify.

Low mortgage rates are also another reason to jump into the home market. According to the Associated Press, the average fixed rate on a 30-year mortgage was 5.14 percent last week. During the week of Dec. 3 the rate hit a historic low of 4.71 percent.