If buyers hurry, housing is hopeful in Tri-parishes

Over the last two years, the housing market has been anything but kosher. Foreclosures have riddled cities across the nation, while mortgage rates have bounced wildly. But today, things are starting to change.

Although the picture may not be perfect, it’s worth taking a look.

For most area-realty groups, sales have been questionable. It’s just a matter of who you talk to.

“Right now, I’ve been pretty busy, but a lot of realtors are saying that sales are down,” said David Newsome, an agent at Century 21 Action Realty in Houma.

A few neighborhoods are sprouting up in the Raceland area, he noted. And even some developments in downtown Houma are taking advantage of vacant lots.

“[Building] is down, but it’s still going on,” said Newsome.

But the trends found in those areas are not evident everywhere.

“You have some areas that are moving and might have some slight appreciation. And I know areas that aren’t moving at all and are declining in value,” explained Cynde Devillier, president of the Bayou Board of Realtors.

New construction is primarily stemming from individuals and private homeowners, rather than large-scale companies, she said. Compared to years past, it’s a stagnant situation.

“We have a lack of affordable land. The land we do have available is expensive and the things we have to do to make it developable are costly,” noted Devillier.

Adding the cost of permitting – especially in flood zones – and a shaky economy puts the market in a no-fly zone for most home builders, as a slew of construction workers and contractors have left the area or found new professions.

“It costs them workman’s compensation, which is very expensive, and they can’t keep people on payroll if they’re not working. If they are still [in business], their team has dwindled down,” added Devillier.

Customers are also apprehensive, as many have been compelled to second-guess making such a big commitment in uncertain times.

However, President Obama’s tax incentive program for first-time homebuyers has hit big, or enough to keep the market somewhat intact. As the clock ticks, buyers hoping to cash in are stepping forward.

It seems $8,000 is enough incentive for people to make the commitment, said Newsome.

“I think the [program] is certainly inspiring people to buy now. I don’t think we’d be seeing as much activity if that wasn’t going on,” he explained.

In November 2009 a new law helped extend the incentive to a broader range of homebuyers. The act – known as the Worker, Homeownership and Business Assistance Act of 2009 – “…brought extra benefits to aid in economic recovery, [but] it also raised more questions as to who qualifies and how to claim it,” according to a news release issued by the Society of Louisiana Certified Public Accountants (LCPA).

Single taxpayers with a modified adjusted gross income of $125,000 are eligible to receive the $8,000 credit. In order to qualify, a home must be bought by April 30 and closing must take place before June 30. Married couples can earn up to $225,000 and qualify for the same credit.

Long-time homebuyers that are in the market to buy a replacement principal residence can throw in their hats for a reduced credit of up to $6,500, or $3,250 for married individuals filing separately.

Members of the military can also benefit from the initiative, as those serving outside the U.S. have an extra year to buy or enter a binding contract, on or before April 30, 2011.

Experts also said lending practices have eased, making buying a home a little easier.

“Prior to the mortgage crash last year, anybody could get a loan. Then [lenders] got real strict on who they would give a loan to. Now, we’re seeing a lot of people qualify that wouldn’t qualify at the end of last year,” noted Newsome.

However, loans that are being handed out could carry more than just a payment plan.

“Banks are lending, but now they’re requiring money down,” said Devillier. “If you’re on a tight budget and you want to buy your own place, you don’t have a whole lot of extra dollars to save.”

About a year back, low-budget buyers could enter the market with almost no money down. But things have changed since the market is correcting itself, she said.

Owning a home can have many intangible benefits like the satisfaction that comes with ownership. It can also make sense financially.

“Renting, you’re essentially throwing money out the window. You’ll never see that money again. When you’re buying a house and you’re making monthly payments on a mortgage, you’re gaining equity on a house,” touted Newsome. “With the appreciation of real estate you’re more than likely going to get that back, plus some.”

For the average person, part of the American dream is owning a home. But the average 30-year mortgage that runs alongside that fantasy could require buckling down.