Charles Rutenberg Realty Broker/Owner Joe Moshe
Comments on Rise in July Home Sales in New York

Joe Moshe, Broker/Owner, Charles Rutenberg Realty, says the increase in home sales in New York State during the month of July could be attributed mostly to short sales, as well as the availability of Real Estate-owned (REO) properties and the federal and state tax credits being offered to first-time homebuyers.

According to preliminary date from the New York State Association of REALTORS, home sales in the state during the month of July rose by 11.8% over home sales in June. New York REALTORS sold 8,398 existing single-family homes in July, compared to 7,509 homes in June. In July, median home prices in New York State rose to $205,000, a 9.6% increase over June's median home price of $187,000.

"A large part of the increase in sales can be attributed to short sales and REO properties, which are bank-owned properties," Mr. Moshe said. "Part of the problem is that it could be a false positive, in that the banks - which own the properties - will place more of their inventory on the market. Although the sales of the homes are going to increase, the prices of the homes will decrease because there will be more available inventory on the market."

Mr. Moshe also said the $8,000 tax credit offered to first-time homebuyers under the American Recovery and Reinvestment Act (ARRA) of 2009 has also played a role in the jump in home sales. In order to be considered a first-time homebuyer, one must not have owned a home in three years. The tax credit could be used to buy a newly built or existing home. To receive the credit, the homebuyer must close by November 30, when the offer for the tax credit ends.

With the federal tax credit expected to come to a close, Mr. Moshe said that New York State residents will be able to take advantage of another tax credit program. Governor David Paterson recently announced the availability of the New York State Mortgage Credit Certificate (MCC) through the State of New York Mortgage Agency. The MCC allows first-time homebuyers to claim up to 20% of the interest paid on the mortgage as a tax credit, saving them an average of $1,500 a year. This will extend - and improve upon - the federal tax credit.

"The state tax credit program is an excellent program," Mr. Moshe said. "With the federal government phasing out the tax credit in a few months, it's great to see that that New York State can come in with its own tax credit."