Home prices inch up on Eastside, in Seattle year-over-year

February house prices nudged up in February in Seattle and on the Eastside while falling by double digits in South King County.

By Eric Pryne
Seattle Times business reporter
March 4, 2010

After a two-year slide, home prices may be starting to inch up in big chunks of King County, February home-sale statistics suggest.

The median price of a house that sold on the Eastside last month was $490,000, up 1 percent from February 2009, the Northwest Multiple Listing Service reported Thursday. While minuscule, it was that area's first year-over-year increase since December 2007.

Seattle's median price also rose slightly for the second month in a row after nearly two years of declines.

Countywide, however, the median single-family home price, $373,010, was down 0.5 percent from a year ago. The chief reasons: Southwest and Southeast King County, the county's most affordable areas, where median prices fell by double digits.

Sales volumes were up strongly throughout the county, 51 percent overall from February 2009. It was the ninth straight month of year-over-year gains, fueled by low interest rates, federal tax credits and mild winter weather.

But brokers say prices in South King County are continuing to fall because houses repossessed by banks and short sales — those for less than the seller owes on the home — make up a bigger share of that market.

Those sellers are more likely to settle for less. "It's putting a lot of downward [price] pressure on sellers who are not in trouble," said Tony Hettler, broker-owner of the John L. Scott office in Des Moines.

In Seattle and on the Eastside, in contrast, brokers say move-up buyers are returning to the market.

In Seattle's Capitol Hill and Madison Park areas, 39 houses sold in February with a median price of $596,000, according to the listing service. That's up from just 17 houses that sold in February 2009, with a median price of $409,000.

"We are starting to see high-end sales in bigger numbers," said Dave Hale, broker at Windermere Real Estate's Madison Park office.

Prices have dropped, he said. Jumbo loans — more than $567,500 — are easier to get. And the stock market has come back from the depths of a year ago.

"For a lot of these folks, their portfolios have probably come up 30 or 40 percent," Hale said. "They're feeling more confident."

He said he sees few short sales or sales of bank-owned homes in the central-city neighborhoods he serves.

In Southwest King County, in comparison, foreclosed homes and short sales make up 26 percent of active listings, Hettler said.

He said he recently completed an analysis for an owner who wondered why condos in his building weren't selling. The answer: Prospective buyers were gravitating toward single-family homes in the same relatively low price range.

"Two or three years ago [condos and houses] wouldn't have been competing for the same buyer," Hettler said.

Overall, King County condo sales rose 26 percent last month from February 2009, the listing service said. The median condo price was down 3 percent but, again, it varied significantly by area.

The median price rose 6 percent in Seattle and 19 percent in Southeast King County, but fell 13 percent in Southwest King County and 12 percent on the Eastside.

The median price of single-family homes sold in Snohomish County in February was $280,000, down 10 percent from the same month last year. Sales were up 53 percent.

For link to article, visit http://seattletimes.nwsource.com/html/businesstechnology/2011259254_homesales05.html

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5 Markets Expected to Fare Best in 2010: Seattle & Tacoma!

Lisa Scherze
SmartMoney.com
Jan 8th, 2010

After a dour year where housing prices fell more than 12% nationwide, will 2010 bring sunnier tidings?

The short answer: only a tad in a select few places but overall not really.

The five areas that Moody's foresees home prices performing best in 2010 are: Tacoma, Wash, (an increase of 2.44%); Memphis, Tenn., (up 0.99%); Pittsburgh (up 0.89%); Charleston, S.C. (up 0.18%); and Seattle (decline of 0.50%). (These five markets are culled from data on Moody's Economy.com and based on the largest 100 metro areas.)

Yes, there have been pieces of good news over the past few months that have indicated a quiet, slow bottoming of real estate prices. For instance, sales of existing homes rose 7.4% in November from the previous month, the highest rate since February 2007, according to data from the National Association of Realtors released last week. The tax incentives for home buyers passed earlier this year along with historically low interest rates have no doubt nudged many buyers into the market.

Yet a recovery depends on several factors. At the top of the list is a turnaround in the labor market. More people going back to work will have a beneficial effect on household income and consumer confidence and would stabilize the housing market, says Stuart Gabriel, director of UCLA's Ziman Center for Real Estate. As of November, one of out every 10 American workers is unemployed, according to the Bureau of Labor Statistics. And while that's down slightly from October, Moody's expects the jobless rate to peak in the third quarter next year at 10.6%.

Another factor is the backlog in foreclosures, which are dragging down values and adding to the housing supply. "By all accounts, that backlog is at a historic high," says Gabriel. "It suggests that many more homes will be sold on a distressed basis either via foreclosure or short sale."

RealtyTrac, an online marketplace of foreclosure listings, estimates 3.2 million households will have received a foreclosure notice in 2009, up from 2.3 million in 2008. The firm projects that number could approach four million in 2010. "We do think 2010 will probably represent the peak, and in 2011 [foreclosures] will start to go down at least marginally," says Rick Sharga, senior vice president at RealtyTrac. Why the acceleration next year? First, says Sharga, there have been enormous delays in processing this year. Many homes that would have gone into foreclosure in 2009 won't actually enter and complete the process until 2010.

Second, a big wave of option adjustable-rate mortgages (ARMs) will reset next year. (These are a somewhat obscure category of ARMs that were popular during the real estate boom, which allowed borrowers to make a range of monthly payments. The options include a partial-interest payment that adds the unpaid interest to the loan's balance. On many of the loans, balances have risen while values of the underlying properties have plummeted.) "The number of loans that will adjust starts to go up significantly in the middle of next year. A lot of those loans are underwater...and owners will be really hard-pressed to avoid going into foreclosure," Sharga says.

Home prices, of course, are variable and depend on many factors, each of which are difficult to predict. Still, average home prices will drop by 7.9% nationwide in 2010, according to Moody's Economy.com. In the few areas where there could be positive price growth, the projected increase is modest. "These areas will essentially be flat next year," says Steve Cochrane, managing director at Moody's Economy.com.

These pockets of the country share a few important characteristics. One is that they are starting with a limited supply of housing stock. Another is that throughout most of the decade, prices basically stayed in synch with household income, says Cochrane.

There are other factors, too. Pittsburgh, for example, along with western Pennsylvania, is late in the traditional business cycle, and "our variations tend to be smaller," says Robert Strauss, a professor of economics and public policy at Carnegie Mellon University in Pittsburgh. The economy has managed to stay fairly stable mostly because over the past several decades it transformed from a center of manufacturing to one of education and health care with a bit of financial services and technology.

Smaller areas across the Southeast are expected to fare well in 2010 primarily because they fared relatively decently during the housing crisis, says Jeannine Cataldi, a senior economist at IHS Global Insight. "They didn't have such a big run-up, and they have a diverse economic base that enabled them to stay stable," she says. Home prices in Charleston didn't get out of line with household incomes; also, Boeing (BA: 61.60, -0.60, -0.96%) is investing in a fairly large manufacturing plant there, which could create some potential for income and job growth, says Cochrane.

As for Memphis, the city's largest employer is FedEx (FDX: 84.99, +2.06, +2.48%). Transportation services is one of the early industries to turn around as the economy recovers, says Cochrane, and that should support the area's housing market.

The economies of Tacoma and Seattle - which are neighboring cities - were "much stronger for much longer than much of the rest of the country," says Cochrane. Software giant Microsoft, based in Redmon, Wash., a Seattle suburb suburb, was one reason the area remained stable. Another was Boeing, which builds its commercial airplanes in Seattle.

Going forward, Seattle's position as a key hub of trans-Pacific trade should be a plus for the economy. Orders are increasing for commercial aircraft and it should see some rising demand for tech products, Cochrane says. The outlook for 2010 for the two Washington cities "is for fairly stable, moderate economic growth," he says.

For link to article, visit http://realestate.yahoo.com/promo/5-markets-expected-to-fare-best-in-2010.html

Happy New Year!

We know it's been awhile since you've heard from us... but we've been busy! Over the next couple of weeks, we'll share some exciting news with you on new projects we're working on. We are all looking forward this new great year. As Bill Donahoe simply put it, "It could not be a brighter outlook for 2010!"

Quote of the Day

The starting point of all achievement is desire. Keep this constantly in mind. Weak desires bring weak results, just as a small amount of fire makes a small amount of heat. -Napoleon Hill

Home sales on King County's Eastside lead December activity

The median price of a house sold in King County last month was $380,000, down 5.8 percent from December 2008 — the last month the median topped $400,000.

By Eric Pryne
Seattle Times business reporter
January 5, 2010

Houses are selling way ahead of 2008's dreary pace all over King County.

And nowhere have sales increased more lately than on the Eastside, the county's most expensive area.

Consider these December numbers, released Tuesday by the Northwest Multiple Listing Service:

• Countywide, closed sales of single-family homes rose a healthy 57 percent from December 2008. On the Eastside, the bump was even bigger: 78 percent.

• Pending sales — accepted offers that haven't yet closed — rose 55 percent countywide, 81 percent on the Eastside.

• Closed sales more than doubled year over year in five of the 29 areas into which the listing service divides King County. Three were on the Eastside: Kirkland, Redmond and West Bellevue/Medina.

The Eastside's surge actually began in the fall, after a summer in which sales there stayed relatively flat compared with 2008 while sales began climbing in more affordable South King County and Seattle.

So what's happening east of Lake Washington? Real-estate professionals offer an assortment of possible explanations: increasingly flexible — or desperate — sellers. The continuing impact of federal tax credits. The improving stock market. Not to mention favorable interest rates.

'Sky not falling'

"Our buyers are realizing the sky is not falling," said Peter Hickey, owner-broker of Windermere Real Estate's Kirkland office.

While King County house sales in December exceeded the previous year's number for the seventh straight month, prices continued to drift. The median price of a single-family home that sold in December was $380,000, down 5.8 percent from December 2008 when it last topped $400,000.

During 2009 the monthly median fluctuated between $363,850 and $395,000, with no clear trend up or down. Median means half the homes sold for more, half sold for less.

But prices did rise year-over-year in December in a few scattered neighborhoods: Woodinville, Shoreline, Southeast Seattle, parts of Renton.

Across the Sound, in Kitsap County, the median price increased 8 percent.

In Snohomish County, the median house price fell nearly 10 percent year over year in December, to $287,000. But buyers also closed on nearly twice as many houses.

Glenn Crellin, director of the Washington Center for Real Estate Research at Washington State University, said he was "pleasantly surprised" by the December sales volumes throughout Western Washington.

He had anticipated a bigger drop from November, when many first-time buyers rushed to close to meet a deadline — later extended — to qualify for an $8,000 federal tax credit. In King County, the month-to-month decline was just 7 percent.

As for the strong sales on the Eastside, Crellin speculated they may be fueled in part by sellers with mounting financial troubles who now are willing to accept lower prices than a few months ago.

"I suspect there is some bargain-hunting going on in those neighborhoods," Crellin said of Kirkland and Redmond.

Hickey, the Windermere broker, said some high-end new homes on the Eastside that have languished on the market for up to two years now are receiving multiple offers.

Price cuts helped, he acknowledged: "We have motivated sellers who have come to grips with the fact that their houses are not worth 2006 prices anymore."

Sales may be increasing faster on the Eastside now than in South King County, the county's most affordable area, because buyers are willing to pay more to be closer to work, Hickey said.

Gerhard Ade, an agent in Coldwell Banker Bain's Kirkland office, said the Eastside continues to attract newcomers to the region who come to work for Boeing, Microsoft and Amazon.com.

The Eastside also may be attracting "trickle-up" buyers who have sold their houses elsewhere in the region to first-time buyers and are looking to relocate, he said.

But Mona Spencer, broker at John L. Scott's Redmond office, said first-time buyers remained a big part of the Eastside market in December, despite the extension of the federal tax credit to June 30. Most of the sales that her office closed last month were for less than $500,000 — starter homes on the Eastside, she said.

"I had two mutually accepted deals on Christmas Day, both to first-time buyers," Spencer said. "I'm seeing more activity. Our sales are up."

Buyers of more expensive homes have the most to gain by taking advantage of the lowest mortgage rates in the last 50 years. In December, the national average mortgage rate on 30-year fixed loans for less than $417,000 was below 5 percent, according to bankrate.com. Rates for loans for larger amounts hovered between 6 and 8 percent.

Link to article: http://seattletimes.nwsource.com/html/businesstechnology/2010703876_homesales06.html

Home sales jump in October, beating expectations

By Alan Zibel
AP Real Estate Writer
November 23, 2009

WASHINGTON — Home sales surged for the second month in a row in October, climbing to the highest level in 2½ years as first-time buyers rushed to take advantage of an expiring tax credit.

Home sales nationwide are now up nearly 37% from their bottom in January, data Monday showed, though they are still 16% below the peak in autumn 2005. At the current sales pace, there is only a 7-month supply of homes on the market and in some areas there are bidding wars.

Joey Wilson, 53, and her husband made unsuccessful offers on 20 Las Vegas homes since midsummer before closing on a four-bedroom, $136,000 home this month.

It's insane," said Wilson, who relocated from Kentucky. "I've never seen a market like this before."

The National Association of Realtors said home resales rose 10.1% to a seasonally adjusted annual rate of 6.1 million in October, from a downwardly revised pace of 5.54 million in September. It was the biggest monthly increase in a decade, and far above the 5.65 million pace expected by economists, according to Thomson Reuters.

The Northeast saw a large increase in home sales. The nine-state region registered 85,000 home resales last month, up 25% from a year ago when the financial crisis gripped the country. The median price, however, fell about 3% to $235,400.

The recovery is being driven by lower prices combined with federal programs to lower mortgage rates and bring more buyers into the market. The median sales price was $173,100, down 7% from a year earlier and off roughly 2% from September.

Many experts predict prices will hit a new low next spring, perhaps falling another 5% to 10%, as more foreclosures get pushed onto the market.

The government has tried to counter that trend by offering a tax incentive for first-time buyers and by keeping mortgage rates around 5% since the spring.

The tax credit of up to $8,000 for first-time owners was originally set to run out on Nov. 30, but Congress renewed it earlier this month and broadened its reach. People who have owned their current homes for at least five years can now claim a tax credit of up to $6,500 for a home purchase. To qualify, buyers must sign a purchase agreement by April 30.

The Realtors' report on October home sales reflects offers made before buyers knew the tax credit would be extended.

"The incentives really did get people to go out and buy," said Wells Fargo economist Adam York. "The question is: What does the trend look like when the credit is over with?"

Home sales are likely to drop over the winter as buyers hibernate for a few months without the looming tax credit deadline.

The new deadline means "we're going to see some good activity coming out of the spring," said Pat Lashinsky, chief executive of online real estate brokerage Zip Realty.

But the government support can't last forever. For example, the Federal Reserve is likely to curtail its effort to push down mortgage rates next year. If rates then rise too high, it would make home purchases less affordable and dampen housing demand.

"When we do kick those crutches out from under the housing market, will it be able to stand on its own?" said Mark Fleming, chief economist with real estate information company First American CoreLogic. "It's really hard to tell."

For link to article, visit http://www.usatoday.com/money/economy/2009-11-23-existing-home-sales-oct_N.htm

Tacoma's Esplanade condos back on market

Less than three months after foreclosure sale of building, condos generate some interest

By John Gillie
The News Tribune
November 14, 2009

The housing bust’s most visible Tacoma casualty, a nine-story, 162-unit waterfront condominium, has quietly been put back on the market.

The Esplanade, a building whose size and timing doomed it to financial peril, is being shown to buyers who previously had shown strong interest in purchasing a condo unit. The resumption of the sales market comes less than three months after the building was sold at a foreclosure auction on the Pierce County courthouse plaza.

The building’s financing bank bought the structure in foreclosure when the only other bidder stopped at $6.1 million, less than 15 percent of the $48 million the bank had lent on the structure.

The building’s original developer, Mark Ossola, who now works for the bank that financed the $80 million building at 1515 Dock St., said he’s optimistic the building will sell out within 12 to 18 months. The new building owner, IStar Financial, counts 10 prospects who have made commitments to buy in recent days.

The crucial difference between now and when he owned the building is the availability of ready financing for potential buyers, Ossola said.

Met Life has agreed to provide financing for qualified prospective buyers, and the Federal Housing Administration has agreed to begin offering financing guarantees once the building is 30 percent sold. That’s down from the traditional 50 percent requirement for FHA loans.

Judy Mayfield, a real estate agent who marketed the building from early 2007 through last June, said she had signed purchase and sale agreements with 119 buyers, but the collapse of the housing market made completing those deals almost impossible. Before the building went into foreclosure, only 10 units sold.

Once the housing market softened, she said, banks were unwilling to finance individual condo buyers because the building had made too few sales. But without banks’ willingness to take a risk that the building would sell up, the building didn’t.

An additional complicating factor was that potential buyers were unable to sell their existing homes without wholesale price discounts after the housing market went comatose.

The bank is reducing prices for the units, another factor that is bringing potential buyers back, Ossola said. He declined to say how much the prices are being cut. The units are not yet officially listed on multiple listing sites.

“We’re doing a kind of soft reopening now,” Ossola said. “Once we get past the holidays, we expect we’ll start a big sales campaign.”

Real estate sales people say they expect the price reductions will have to be substantial to spur new interest.

When she was selling the units, list prices ranged from $278,000 for a smaller unit to $989,000 for a penthouse, said Mayfield, though buyers did negotiate some lower.

Mayfield said she has no inside knowledge about the new pricing, though she wouldn’t be surprised if asking prices were 20 percent to 30 percent off previous list prices.

“That’s not a reflection on the building. It’s an excellent building. It’s just the market,” she said.

Seventeen unsold units at the Marcato, another downtown Tacoma condo, recently sold at auction for an average of 55 percent of their original asking prices. That building, though a quality structure, didn’t have the waterfront views that make the Esplanade especially attractive.

Ossola said he’ll likely seek a zoning change to allow the use of some of the building’s ground-floor commercial space for offices. Present zoning allows only retail and restaurant operations.

The four corner commercial spaces likely will still be reserved for restaurant use, Ossola said, but other spaces could become professional offices. The building had seen considerable interest from lawyers, doctors and accountants to rent some of the waterfront commercial spaces, but the zoning forbade it, he said.

Several restaurants had expressed interest in the waterfront commercial units, but they remained hesitant to commit until more people live in the building.

“It’s a numbers game. When we have more people living down here, I think we’ll see more restaurants,” he said.

Ossola said the building was a victim of bad timing.

“Had we got it on the market a year earlier, I think it would be sold out now,” he said.

For link to article, visit http://www.thenewstribune.com/business/story/954133.html?pageNum=1&&mi_pluck_action=page_nav#Comments_Container

Tax credit brings house buyers out in October in King, Snohomish counties

The federal tax credit for first-time homebuyers pushed sales in the Seattle area to new highs for the year in October.

By Eric Pryne
Seattle Times business reporter
November 6, 2009

Give credit to the credit.

Home sales in the Seattle area reached new highs for the year in October, a burst real-estate professionals attributed in large part to the $8,000 federal tax credit for first-time buyers.

p>In King County, closed sales of single-family homes were up 33 percent from last October, the Northwest Multiple Listing Service said in a report released Thursday.

In Snohomish County the bump was even more dramatic: 42 percent.

Even condos finally came to the party. Closed sales in King County last month were up 18 percent, the first year-over-year increase since July 2007.

But at least some buyers were rushing to meet a deadline: The credit was due to expire Nov. 30. Congress this week approved legislation that extends it by seven months.

Will that turn down the heat for the next few months?

"It could be the catalyst that kills the buzz, because people have more time," said Dean Jones, president of the condo-marketing firm Realogics in Seattle.

Or it could push sales to new heights, he added: The bill establishes a new, $6,500 credit for many buyers who aren't first-timers. "It's too early to tell."

While more houses were sold in King County in October than in any month since August 2007, prices continued to slip. The median price of a single-family home that closed last month was $377,500, down from $392,000 in October 2008.

But the year-over-year decline — 3.7 percent — was the smallest in a year.

The median price of King County condos was down 8.7 percent, to $251,000. The median house price in Snohomish County slid 12.2 percent, to $292,725.

October marked the fifth straight month of year-over-year increases in house sales in King County.

A breakdown of the numbers reveals some surprises.

• Sales were up a whopping 54 percent on the Eastside — the county's most expensive area — and nearly 40 percent in Seattle.

• Sales declined in Auburn, Federal Way, Des Moines, Burien and SeaTac — all among the county's most affordable cities, places to which you'd think many first-time buyers would gravitate.

"I wish I had an answer for that," said Barry Crittenden, broker in Windermere Real Estate's Burien office. "I've been puzzling over that myself."

Perhaps, he said, lower prices and the first-time buyers' tax credit are allowing budget-conscious buyers to consider neighborhoods that are "a little more upscale."

On the Eastside, the tax credit has helped spur sales in neighborhoods south of Interstate 90, said Thadine Bak, broker in Windermere's Bellevue South office.

It also has created what she called "trickle-up" buyers: Homeowners looking for new, often more expensive homes once they sell their houses to first-timers. There has been a burst of interest recently in houses in South Bellevue in the $600,000-$700,000 price range, Bak said.

Eastside sales increased partly because sellers are getting more realistic in pricing their homes, said Mona Spencer, broker in John L. Scott's Redmond office: "They're finally getting it."

But the impact of the federal tax credit can't be understated, she added: "It gives [buyers] an incentive to go out and look."

Same goes for condos, said Jones, of the condo-marketing firm: "It's what's getting them off the fence."

The median condo sale price in Seattle actually was up 4.4 percent in October from the same month last year, hitting an even $300,000. The biggest increases came on Queen Anne and Capitol Hill.

But Jones and Ben Kakimoto, a condo specialist for John L. Scott, said sales in some new condo buildings aren't included in the listing-service statistics because developers market units directly.

If sales in those buildings had been included, Kakimoto said, the median October condo sales price would have been even higher.

For link to article, visit http://seattletimes.nwsource.com/html/realestate/2010212918_homesales06.html

Home sales rise 9.4 pct in Sept., beats forecast

Home resales in September clocked the largest monthly increase in 26 years as buyers scrambled to complete their purchases before a tax credit for first-time owners expires.

By Alan Zibel
AP Real Estate Writer
October 23, 2009

WASHINGTON — Home resales in September clocked the largest monthly increase in 26 years as buyers scrambled to complete their purchases before a tax credit for first-time owners expires.

Sales jumped 9.4 percent to a seasonally adjusted annual rate of 5.57 million last month, from a downwardly revised pace of 5.1 million in August, the National Association of Realtors said Friday.

That pace was the strongest in two years and beat Wall Street forecasts. Sales had been expected to rise to an annual rate of 5.35 million, according to economists surveyed by Thomson Reuters.

"There's a mini-boom going on in the housing market," said Thomas Popik, who conducts a monthly survey of real estate agents for Campbell Communications, a research firm.

Nationwide sales are up nearly 24 percent from their bottom in January, but are still down 23 percent from four years ago.

Prices, however, continued to be dragged down by foreclosures and short sales, where the mortgage exceeds the sales price. The median price last month was $174,900, down almost 9 percent from $191,200 a year earlier, and slightly lower than August's median of $177,300.

The inventory of unsold homes on the market fell about 7 percent to 3.63 million. That's less than an eight-month supply at the current sales pace, and the lowest level since March 2007.

Sales rose around the country, especially in the West, where they grew 13 percent from a month earlier. Foreclosure sales are booming in cities like Los Angeles, San Diego and Las Vegas.

First-time homebuyers and investors are snapping up those homes and taking advantage of low mortgage rates. These buyers can also take advantage of a tax credit of 10 percent of the sales price, up to $8,000, if the sale is completed by the end of November.

The tax credit is so important to some buyers that they are adding a clause to their contracts, allowing them to back out if the sale doesn't close by Nov. 30. However, economists note that bargain-priced foreclosures and low mortgage rates are making a big contribution to the sales boom.

"We think the housing market has touched bottom and it is now only a matter of time until home prices stabilize - something that we anticipate to occur in late 2010," wrote Joseph LaVorgna, chief U.S. economist at Deutsche Bank.

Prices could fall further because rising unemployment leads to more foreclosures. The jobless rate, currently at 9.8 percent is expected to rise as high as 10.5 percent next year, causing more people to fall behind on their mortgages.

"There's more supply that's going to come into the marketplace," said Stan Humphries, chief economist at real estate Web site Zillow.com. "That additional supply will outpace demand."

With concerns about the housing market still prominent, Congress is considering several proposals to extend the tax credit for first-time buyers. Senators Johnny Isakson, R-Ga., and Christopher Dodd, D-Conn., want to extend it through June 30, and expand it to include all home buyers, at an estimated cost of $16.7 billion.

Realtors and homebuilders are loudly in favor, arguing that the tax credit is crucial to get the housing market back on its feet.

"We are not there in terms of removing the consumer fear factor," said Lawrence Yun, the Realtors' chief economist.

However, some analysts say the tax credit may not be as critical to the housing market as real estate agents suggest. "The group has an incentive to talk up the effects of the credit as it is urging Congress to extend it, and it therefore may be exaggerating the credit's effects," wrote David Resler, chief economist with Nomura Securities.

One potential roadblock to an extension also emerged this week. There are concerns that some of the 1.5 million applications for the tax credit are fraudulent.

At a hearing on Thursday the Treasury Department's inspector general for taxes questioned the legitimacy of some 100,000 claims for the credit, potentially including some illegal immigrants and 580 people under 18. The youngest taxpayers to apply for the credit were 4 years old.

For link to article, visit http://seattletimes.nwsource.com/html/businesstechnology/2010121720_apushomesales.html