Northeast home resales climb 17 percent in July

NEW YORK (AP) - Home resales in the Northeast recorded its fourth straight monthly gain in July, mirroring the national numbers that show the housing market is on the mend.

The nine-state region registered 105,000 home resales last month, up nearly 17 percent from June and 4 percent higher than a year ago, the National Association of Realtors said Friday.

The median price was still down, tumbling 15 percent to $236,700 from the year before.

Nationally, sales of existing homes edged up about 5.6 percent in July from the previous year, without adjusting for seasonal factors, while the U.S. median sales price slid more than 15 percent to $178,400.

After a dismal first half of the year, prices in the Northeast have finally fallen enough to lure back buyers, said Jonathan Miller, president and chief executive of real estate appraisal and consulting firm Miller Samuel Inc. in New York.

The looming expiration of a federal tax credit is also feeding the sales rush, he said. First-time buyers must complete their deals by the end of November to get a tax credit of 10 percent of the sales price, up to $8,000. The real estate industry is lobbying Congress to get the credit extended.

"The credit has played a critical role. It's on par with Cash for Clunkers," Miller said, referring to the hugely successful government program that offers up to $4,500 to shoppers who trade in cars for more fuel-efficient models.

Six of nine major Northeast cities tracked in the Associated Press-Re/Max Monthly Housing Report showed annual gains in home sales in July. The report analyzed sales transactions in the metropolitan statistical areas recorded by all real estate agents, regardless of company affiliation.

Pittsburgh and Philadelphia both registered a less than 2 percent drop, but the New York suburban area posted a steep decline in annual sales. Volume there plunged 20 percent, but month-over-month, it recorded a 3.3 percent gain. The median price fell 7 percent to $413,500.

Foreclosures there have ticked up as job losses and wage cuts hit the area, which is largely dependent on the hobbled financial industry.

"There's still a certain amount of fear out there, but the market has picked up since earlier this year," said Kevin O'Shea, a real estate agent with Home of Westchester Inc. in White Plains, N.Y.

New England cities showed the largest sales increases in July, with Augusta, Maine, leading the way. Home sales there jumped 19 percent from a year ago.

The reason? First-time homebuyers are flocking to anything priced under $150,000, said Don Plourde of Coldwell Banker Plourde in Waterville, Maine. They're motivated by the federal tax credit and an extra state credit of up to $5,000 or 4 percent of the mortgage amount.

"The more the word gets out, the more people are thinking now is a great time to buy," he said.

Foreclosures still are a thorn there, making up more than one in four sales, Plourde said. That pulled the median price down more than 9 percent to $135,000 from the year before.

Distressed sales also are battering Providence, R.I., the worst. The median price there dropped 13 percent from the year before to $205,000, the most in the Northeast.

"Foreclosures are killing us," said Chet Szafranski, a real estate agent with Keller Williams Realty in Cranston, R.I.

After a brief respite, foreclosures started piling up again in the second quarter, the worst of it in downtown Providence. The suburbs are faring better. Sales volume in July increased nearly 9 percent from a year before in Providence.

In Boston, one of the first markets to fall into the housing slump, sales perked up by 6 percent in July, while the median price fell 3 percent to $342,750.

Buyers are flocking to downtown homes priced in the $400,000-$500,000 range and suburban properties in the mid-$300,000s, said Bart Foster, an agent with The ERA Norton Group in Summerville, Mass.

"The tax credit is helping people get off the fence," he said.

Pittsburgh was the only region to boast an annual gain in price. The median house sold for $136,250 in July, up almost 4 percent. Sales still edged down by less than 2 percent.

The Steel City never saw an out-of-control housing boom like other parts of the country, so house prices there have remained steady, said George Hackett, president of Coldwell Banker Real Estate in Pittsburgh. The federal tax credit also has left a mark on the metro.

"We've got tens of thousands of homes perfect for the first-time homebuyer and we've taken advantage of that," Hackett said. "That's been a good program here."