Midwest home resales up 6%

? Home sales in the Midwest increased in September as a soon-to-expire tax credit for first-time buyers and glimmers of an economic recovery brought more people to the closing table.

The National Association of Realtors said Friday that there were an estimated 110,000 resales in the Midwest, up 5.8 percent from September last year. The median sale price for the region fell 1 percent to $147,600, marking the smallest decline in the country.

To varying degrees, economists and local housing experts say the federal tax credit has boosted sales. First-time buyers can receive a credit of 10 percent of the sales price, up to $8,000. The real estate industry is pushing for Congress to extend the credit past its Nov. 30 deadline.

“I do think we’re going to see some real solid gains in the third quarter in the Midwest” because of the tax credit, said David E. Clark, economics department chairman at Marquette University in Milwaukee, Wis. “You’ll see that everywhere but especially here in the Midwest where our homes are already very affordable.”

The jobless rate in the Midwest dipped from 10 percent in August to 9.8 percent in September, the only region to show a decline last month. But the rate is still up from 6.4 percent in September last year as automotive layoffs took their toll.

Here are some of the highlights from the region:

• Biggest sales gain: Fargo, N.D., saw the number of sales jump 23 percent from a year ago. Meanwhile, median price declines were moderate, slipping about 3 percent year-over-year to $139,950.

North Dakota’s unemployment rate was far below the national average last month at 4.2 percent, which was only about 1 percentage point above a year ago.

• Biggest sales loss: Sales in Cleveland, Ohio, were the worst in the region, falling almost 12 percent from a year ago. The median sales price, however, was stable, gaining almost 2 percent to $116,000.

The manufacturing-heavy city has suffered numerous plant closures and layoffs in recent years.

• Biggest price gain: Indianapolis led the region with the median sale price tiptoeing forward more than 4 percent year-over-year to $120,000. Overall sales, however, continued to fall, declining almost 10 percent from September 2008.

Sharron Hill, with Hill & Associates in suburban Indianapolis, said the market has not seen much permanent appreciation in home values because of an uptick in foreclosed homes and what she considers poor appraisals. A recent appraisal reduced the value of one of her listings by $20,000, which she blamed on lenders overcorrecting for the mistakes that led to the housing bubble.

• Biggest price decline: Detroit continued to lead in an unfortunate trend as the median sale price dropped almost 22 percent from a year ago to $65,000. The lower prices have brought in investors and bargain-hunters, however, and sales rose more than 3 percent last month.

• Inventory highlight: The number of unsold homes fell in every Midwestern city last month from a year ago, according to the AP-Re/Max report. Indianapolis, Detroit and Cleveland led the region, with inventory drops of more than 29 percent each. Wichita, Kan., had the smallest, shaving just 0.2 percent off its backlog.

Housing experts say reducing the existing inventory of unsold homes is key to sustaining a resurgence in home prices.

National numbers

Nationwide sales rose to a seasonally adjusted annual rate of 5.57 million last month, from a downwardly revised pace of 5.1 million in August. It was the strongest month in two years and beat economists’ forecast of 5.35 million, according to Thomson Reuters. Sales, however, are still down 23 percent from their peak four years ago.

In another positive sign, the inventory of unsold homes on the market fell almost 8 percent to 3.6 million. That’s less than an eight-month supply at the current sales pace, and the lowest level since March 2007.

The median sale price fell 8.5 percent to $174,900, the National Association of Realtors said.