WASHINGTON (AP) – First-time homebuyers looking for bargains, often on foreclosures, snapped up about half of all previously occupied homes sold last month, but the spring selling season is getting off to a lackluster start with sales falling more than expected from February levels.

Home sales fell 3 percent to an annual rate of 4.57 million in March month from a downwardly revised pace of 4.71 million units in February, the National Association of Realtors said Thursday.

Real estate agents across the country said they are getting calls from first-time buyers looking to take advantage of a new $8,000 tax credit that was part of the latest economic stimulus package.

“It is truly making up a large portion of our business.” said Josh Roy, an agent with Keller Williams Realty in Wichita, Kan.

And that should give a boost to sales figures for early summer.

“The prices keep going down and the $8,000 (tax credit), that really helps,” said Jorge Martinez, 30, an independent truck driver, who was house hunting in Miami last Sunday with his wife. “We want to invest while the market is down.”

Nationally, the median sales price in March was $175,200, a plunge of 12 percent from a year ago. Prices are expected to keep sinking as long as demand remains sluggish.

“We suspect that prices have yet to reach their floor,” wrote Paul Dales, U.S. economist with Capital Economics.

Interest rates near record lows also are helping buyers afford a home. The average interest rate on a 30-year fixed-rate mortgage was 4.8 percent this week, Freddie Mac said Thursday. But to qualify, buyers better have good credit, cash for a down payment and lots of patience.

“Every loan that goes through is really scrutinized. We’ve never produced so much paper in our lives,” said Tom McKinnon, an agent with Re/Max Realty 2000 in Fargo, N.D.

As unemployment grows and fallout from the mortgage crisis continues, foreclosures and distressed sales are dominating the market – especially in California, Florida, Nevada and Arizona, where several metro areas have seen a bottom in sales volumes and are now in recovery mode. The Realtors group estimates that about half of sales nationwide are from foreclosures or other distressed property sales.

Sale in San Francisco, for example, jumped 29 percent in March compared with a year ago and most of them were foreclosures.

“The majority of transactions are distressed (properties),” said Joe Bega, an agent with ZipRealty who covers the San Francisco market. “It’s a crazy market. Everything has multiple offers and it’s a bidding war with what’s available.”

And in Las Vegas, where sales almost doubled over last March, agents say they are seeing an influx of investors ready to pay cash.

“All of a sudden, people are putting full-price offers or close to full-price offers – cash,” said Willie Sosa, an agent with Century 21 Consolidated. “That’s something I can tell you has been an anomaly just over the past 45 days.”

The number of unsold homes on the market at the end of March fell 1.6 percent from a month earlier to 3.7 million. But due to the slumping sales pace, it would still take almost 10 months to rid the market of all of those properties.


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