U.S. home sales surged 11 percent in the third quarter - and 18 percent in New Jersey - as first-time home buyers seeking the $8,000 government subsidy rushed into the market.
Prices rose compared to the prior quarter but remained down 11 percent from a year ago for the U.S. and 10 percent lower for Atlantic County, according to the National Association of Realtors survey released Tuesday.
Home sales in New Jersey were 8 percent higher than a year ago, while U.S. sales were up 6 percent from the year before.
The New Jersey Association of Realtors said the increase was caused by the federal government's $8,000 first-time homebuyer tax credit, which had been set to expire at the end of November but was extended and expanded through April 30.
"The jump in third quarter activity in New Jersey as a whole can largely be attributed to the summer and early-fall rush of first-time home buyers aiming to close in time to obtain the $8,000 tax credit," Jarrod C. Grasso, association executive vice president, said in a statement.
Grasso said the statewide housing market is heading toward stabilization, thanks to the federal housing stimulus.
Lawrence Yun, chief economist of the National Realtors, said the tax credit was a powerful catalyst that, when combined with low prices and interest rates, tipped prospective buyers into the market.
"The buying conditions this year are the most favorable on record dating back to 1970, but the tax credit is allowing buyers to set aside any reservations about waiting for a better deal," Yun said in a statement.
Home prices were lower from a year ago for 123 out of 153 metropolitan areas surveyed by the Realtors, including the Atlantic City area.
The Atlantic County third quarter median price of $223,000 was up from $218,700 in the second quarter but still down from $248,900 a year ago.
Grasso said each of New Jersey's surveyed metropolitan areas showed a price increase from the second quarter, a sign that competition in the marketplace is returning.
The Realtor survey doesn't track home prices in Cape May or Cumberland counties.