By Thomas Harding

By now you have heard the good news I’m sure. The $8,000 tax credit for first time homebuyers has been extended and the government has created a new tax credit for people who already own a home (for at least five years) for $6,500. Hallelujah! As a homeowner, lender, realtor, banker or contractor, you have got to just love the fact that the U.S. Government believes so strongly in real estate and the accumulation of private property.

We have already seen the impact of the initial tax credit. Figure 1 shows the most recent data from the MLS for October 2009 for Jefferson County. This is an extraordinary improvement for the same time last year. But the news is better than even the most positive might have expected. Not only are we seeing brisker sales than we have seen for years — lower times to close, higher numbers of transactions, higher ratios of sales price to list price — but the number of homes for sale (“inventory”) continues to fall which lessens the pressure on sellers to reduce their prices.

Now let’s talk about a more depressed part of the market: land. The number of lots that have sold in Jefferson County can be counted on two hands. For real. This is astonishing considering the explosion of new construction that the county has seen over the past five years. Some have said that the population in the county will double over the next ten years, not any time soon according to local developers and homebuilders.

Land has been impacted by the real estate depression more than any other part of the market. The land that has sold in the area has seen reductions in value of as much as fifty percent. However, over the past few weeks, we are seeing the beginnings — and I mean beginnings — of the tops of the green shoots of a recovery for land sales. A few single lots have gone under contract, some privately and some on the open market. And while large subdivisions continue to fester undeveloped, there is talk amongst local developers that just perhaps, in 2010 the diggers and rollers and dump trucks might start operating again, at least for the already approved and bonded communities.

And now that the new zoning ordinance has been well and truly rejected by the residents of the county, we may be entering a period of reliability in the zoning climate which might trigger an uptick in planning and subdivision applications. But there is a natural brake on such activity. The local engineers have made significant cuts in their long— time staff due to the precipitous drop in their workload. It will take months if not years for them to be able to gear up enough to tackle the volume of developments we saw in 2004 and 2005.

All in all positive news this month. It may be too early to call, but we might be climbing up the slope of a “V”, rather than the middle slope of a “W”, in the real estate recovery.

Here’s hoping.

Thomas Harding is Broker for Greg Didden Associations in Shepherdstown, West Virginia.