This time last year, when the economy tanked, the housing market also took a major hit.
"It was a little scary," said Shelly Cash, from Counselor Realty in Willmar. Nothing was happening, she said. "People just hunkered down."
The creation of the $8,000 tax credit for first-time home buyers helped rejuvenate the local market and resulted in a "healthy" summer of transactions, she said. About one-third of the transactions at her office involved first-time home buyers using the tax credit.
The credit had "a positive impact" for the community and for home buyers and sellers, said Cash, who's concerned people might miss the Nov. 30 deadline to qualify for the incentive.
"There's a sense of urgency," she said, especially for those obtaining loans from the USDA Rural Development program. A backlog with that popular program could mean up to eight weeks for loan approval and could mean missing out on the tax credit deadline.
Despite rumblings that the tax credit could be extended to more people and expanded with a larger financial incentive, Cash said there's no guarantee the tax credit will continue past Nov. 30.
So far, 28,700 Minnesota home-buyers have used the tax credit, according to the IRS. Nationwide, 1.4 million people have signed up.
"We are seeing some people jumping on," said Lacey Aalderks, from Re/max Preferred Realty of Willmar. "It's definitely making an impact."
A couple who'd been looking for a home for 1½ years realized "time was running out" on the tax credit and recently closed on a house, said Aalderks. "They decided they absolutely wanted to get that money."
Aalderks, who works primarily with first-time home buyers, said 75 percent of her business is happening because of the $8,000 incentive. That's resulted in a slight increase in sales this year over last year, she said, with first time home buyers picking up houses anywhere in the $20,000 to $200,000 range.
If the tax credit hadn't happened, Cash has no doubt the housing market would've been worse this year.
"Oh my word. I think I'd be looking for a different job," she said.
But Mary Peterson, a realtor with All-Star Realty in Willmar, said she's not sure the tax credit has been that big of an incentive.
Tight credit from lending institutions, a shortage of homes under $100,000 and rumors that the credit may be increased to $15,000 may be part of the problem, she said.
"We haven't seen a huge jump," she said. The number of homes being purchased now is similar to what it was "before we got into this economic mess."
What she has seen a big jump in is the number of foreclosures.
Peterson does pre-foreclosure inspections for three area lenders when people "start missing their payments."
In Kandiyohi County she does 60 to 70 of these inspections every month. About 25 percent result in actual foreclosures, she said.
The remaining 75 percent may be able to stabilize their payments for a time, but it's not uncommon for financial relapses to occur and for homeowners to move "in and out of danger." She's been to the same addresses many times during the two years she's done the inspections.
There are just as many $50,000 houses as there are $300,000 houses that are at risk of being foreclosed on, she said.
Peterson predicts there will continue to be a high number of foreclosures here for the next two to three years. She said there are options for homeowners to work with mortgage companies to resolve financial issues.
The realtors agreed it's been a challenging year. "But we will rebound," said Cash.