The Christy Allen Team

Charlotte-area home sales soared last month, reaching the highest level in almost two years, but there's also a clear signal the market has slowed following the expiration of homebuyer tax credits.

The 2,537 houses, townhouses and condos sold last month mark an increase of nearly 33 percent compared with May 2009, according to results released Wednesday by the Charlotte Regional Realtor Association.

That marked eight consecutive months of year-over-year gains and the largest jump of the downturn.

The sales reported, however, are closings, the final step in the process. The best current measure of sales comes from pending contracts, typically signed a month or more before the final closing.

Pending deals dropped more than 30 percent from April, signaling that the April 30 expiration of tax credits has slowed months of accelerating sales in the Charlotte area. That's in line with early estimates of sluggish sales nationwide, despite low interest rates and price discounting.

Experts and industry watchers worry whether the fragile housing market will hold its own or crumble again, a bleak "double-dip" scenario.

But Joe Clorite, a Keller Williams Realtor in Charlotte, says he's been pleasantly surprised.

"We haven't seen a big drop-off," he said.

Among his customers are Megan Hardy, who is 26 and works for a commercial property management firm, and her boyfriend, Chris Chambers, also 26 and a Web developer.

The couple are eager to get out of their cramped Charlotte apartment, where thin walls give them front-row seats to their neighbors' noisy lives. They want a backyard so his dog, Dodger, can rejoin them. They're looking at houses in west Charlotte to be near friends and family in Belmont, where they began dating in high school.

Hardy and Chambers didn't start house hunting until April, after she checked with a lender about how much they could qualify to borrow. They missed a tax credit of up to $8,000, but she says that's not a problem.

"I don't want a government handout to be a motivating factor," Hardy said. "We want to take advantage of the low prices right now. It's a terrible time to sell and a wonderful time to buy."

Housing prices have shown more stability this year, locally and nationwide, after a few years of declines. The average Charlotte-area selling price rose last month to $212,454. That's an increase of 6.6 percent from a year ago and the largest gain of the downturn for transactions through the Realtors' Carolina Multiple Listing Services.

The price uptick could be an indication the average was skewed by a handful of high-end sales. The gain also could reflect sales of more midrange houses to buyers taking advantage of the "move-up" tax credit for existing homeowners.

Nationally, that credit and the first-time-buyer credit are estimated to have prompted nearly 1million people to buy who otherwise would not have. Both credits have expired.

Buyers must close by June 30 to get the credits. The National Association of Realtors, concerned that tighter lending standards could delay mortgages, has asked Congress for flexibility on that deadline.

Sandy Coyer, a Keller Williams Realtor in the Lake Norman area, said that last month she sold a house for about $290,000 and one for $325,000 but that sales are mostly limited to homes below $250,000. Many are foreclosures.

Clorite, with Keller Williams in Charlotte, said foreclosures and other distressed sales account for about three-fourths of his business.

Those sales, usually at steep discounts, are weighing on prices. Prices also could tumble again as sellers seek to entice buyers in a weak market.

Coyer recommends working with an agent who can provide up-to-date price analysis.

"Prices still have the potential to fall more," she said.

Hardy and Chambers have looked at foreclosed properties, knowing their first place can't be their dream home. They've seen bathrooms stripped of toilets and shower heads, air conditioners destroyed by copper thieves and kitchens without sinks. They're looking for a bargain in liveable shape.

"I think I will hold out until I find what Chris and I want," she said. "Tax credit or no credit, I'll take the low interest rate."