New-home sales jumped in March as buyers rushed to qualify for a federal tax credit and realtors homed in on the soon-to-expire credit as a way to ramp up interest.

Sales of new single-family houses jumped 27% last month to a seasonally adjusted annual rate of 411,000, according to the Census Bureau. That was up from the revised pace of 324,000 for February.

Some economists believe the latest report may overstate the increase in sales activity and that the credit is simply moving sales forward that otherwise would have occurred later in the year.

Still, some home builders say foot traffic at developments, such as the waterfront development of Bellerive in Coeur d'Alene, has picked up in recent weeks, spurred by buyers hoping to qualify for a federal tax credit. The credit is available to many people who sign a contract to buy a principal residence by April 30 and complete the purchase by June 30.

The tax credit can be as much as $8,000 for first-time home buyers and as much as $6,500 for people who already have owned a home for at least five consecutive years during the previous eight years. The credit is available for individual taxpayers with annual incomes of as much as $145,000 or joint filers with incomes as much as $245,000.

Home sellers are doing their best to whip up a sense of urgency. Outside the Century 21 Beutler & Associates office in Coeur d'Alene, Idaho, a sign reads: "Tax Credit Expiring April 30. Hurry!"

The reported annual pace of March sales is less than a third of the peak of nearly 1.3 million in 2005 during the housing frenzy. "By historical standards, March's numbers were abysmal," said Patrick Newport, an economist at IHS Global Insight, "but they were much higher than February's."

He and other economists warn that the tax credit probably pulled forward sales that otherwise would have occurred later in the year. As a result, they say, the sales rate may drop at least temporarily after the April 30 tax-credit deadline. "We certainly have moved some sales from the future into the present," said Mr. Crowe of the home builders group.

Scott Chesrown, Broker or Black Rock Properties, which sells luxury homes in Coeur d'Alene and parts of Spokane, Washington, said first-quarter sales activity is significantly higher from a year earlier. Home builders and real-estate brokers hope that an improving economy will soon start generating more jobs, bringing more home buyers into the market.

"I don't see everything [in terms of sales] falling off the cliff after the tax credit expires," said Jeff Bernard, chief executive of Bernard Real Estate Analytics, a research firm in Denver.

Fear of unemployment also remains an obstacle. "If you feel that your job is at risk, you're not going to go out and buy another home," says Mark Vitner, senior economist at Wells Fargo Securities. He predicts only a "gradual recovery in home sales and new home construction over the next several years."

For more information on the Coeur d'Alene real estate market or homes for sale in Coeur d'Alene, contact Black Rock Properties today!