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As Maryland's housing industry shows signs of a revival, Realtors, homebuilders and others are lobbying for an extension of the federal $8,000 first-time homebuyers tax credit, which expires Nov. 30.

The tax credit, which was enacted this year to give the housing market a shot in the arm, has been a huge help to the homebuilding industry, said John Kortecamp, executive vice president and CEO of the Home Builders Association of Maryland.

"It's gotten people off the sidelines," Kortecamp said.

For first-time buyers, the $8,000 credit has been enough of an incentive "if somebody is straddling the fence," agreed C. Theodore Koebel, a professor of urban affairs and planning at Virginia Tech.

The scheduled end of the program has prompted a frenzy of activity in local real estate offices. Sales of existing homes in the state increased by 13.6 percent in August from August 2008, with much of the increase near Washington, D.C., according to figures from the Maryland Association of Realtors. That was the fourth consecutive month in which year-over-year sales have risen.

Transactions in the Long & Foster Real Estate office that serves the area around Fort Meade and Baltimore-Washington International Marshall Airport rose higher in August than in any previous month in the past seven years, said Steve Meszaros, office manager. It was particularly extraordinary, as August is not usually a strong month for housing sales, he said.

"A lot of that increase is due to the tax credit," said Meszaros, who is also board president of the Maryland Association of Realtors. He estimated that 28,000 buyers have taken advantage of the program in the state.

"Getting $8,000 back is a big incentive," he said. "That is the boost we have needed."

Several bills have been filed to extend, and even expand, the program. One by U.S. Sen. Benjamin L. Cardin (D) of Pikesville would extend the program by six months until June 1. Another by Georgia Sen. Johnny Isakson (R) would increase the maximum credit to $15,000; eliminate income caps of $75,000 for an individual and $150,000 for a couple; and apply it to all buyers, not just first-timers. Both of those proposals are in the Senate Finance Committee.

The homebuilder group supports providing as much incentive as possible in light of the immense spinoff benefits to the economy related to new housing construction, Kortecamp said.

Meszaros said he would like to see the credit extended through the end of 2010 and offered to all homebuyers, not just first-timers. He acknowledges that is not likely, but "I think some kind of extension will happen," Meszaros said.

Some have balked at the cost of the program, which is estimated at $11 billion, with some 1.4 million people nationally using it. Neither Cardin's nor Isakson's bill had attracted more than 20 cosponsors as of this week.

Cardin and others spoke Monday at the Maryland Realtors group's ribbon-cutting ceremony for its larger 13,000-square-foot headquarters in Annapolis.

"The collapse of the housing market was one of the major contributing factors that led to this economic downturn and recession, and its resurgence will be one of the factors that will help pull us out," Cardin said in a statement.

The positive impact is particularly seen in lower-priced housing of up to $300,000, said Marty Lapera, president and CEO of Frederick County Bank.

However, "there is a ripple effect with sellers of lower-priced homes moving up, so the first-time homebuyers tax credit has had a positive impact at price levels above $300,000, also," Lapera said.

Frederick County Bank's mortgage product offerings are limited because the institution originates loans only for its own portfolio and does not sell loans into the secondary market, Lapera said. Still, the bank has seen its mortgage origination rise in recent months, he said.

The number of homes on the Maryland market, about 44,000 in August, has also been decreasing, which analysts see as a sign that homes are moving off the market.

Stronger position

Maryland's homebuilding industry is in a stronger position than those in most states, Kortecamp said. New single-family building permits issued this year through August are down only 19 percent from a year ago in Maryland, compared with a national decline of 33 percent, according to figures from the National Association of Home Builders and the U.S. Census Bureau.

Maryland is benefiting from a lower unemployment rate than most of the nation, Kortecamp said. Low interest rates for mortgages and Maryland's high household income are other factors driving the activity, Meszaros said.

"Lenders are very willing to lend to qualified buyers," he said. "The market is still buyer-friendly."

The Pentagon's base realignment plan is expected to cause a spurt of housing sales as thousands of people move to Maryland in the next few years. Counties such as Frederick that have a strong military base presence and benefit from federal spending will fare better than others, Lapera said.

A 2006 state report estimated that roughly 28,000 new homeowners and renters would move to Maryland because of the base realignment. While updated numbers could show that the recession has driven that number down, Mike Raia, spokesman for Lt. Gov. Anthony Brown (D), said he would not be surprised if that number increased.

Beyond BRAC, the market will really turn around once more existing homeowners begin selling their current houses and moving up to larger homes, analysts said. These homeowners — not first-time buyers — constitute the bulk of demand, Koebel said.

The median price of existing homes sold in Maryland has still not budged upward in most places. That was $265,862 in August, down 10 percent from a year earlier.

But the median price rose in seven counties, with Talbot's $431,045 the highest in the state. Allegany County posted the lowest median price in Maryland at $110,000.

There is concern that the number of bank-related sales such as foreclosures may still put some downward pressure on prices, Lapera said.

"Until the banks reduce their amount of mortgages past due, home value appreciation will probably be minimal," he said.

Bobby McMahon of Capital News Service contributed to this report.