Sunday, February 28, 2010

LOCAL NEWS: Tax credit gives boost to home sales

The housing market north of Boston is on an upswing, real estate agents say, but it’s not time to strike up a chorus of “Happy Days Are Here Again’’ just yet.

“We’re seeing a lot of activity. The buyers are out there,’’ said Mary Holmes, an agent with Century 21 Heritage Realty and president of the Greater Newburyport Association of Realtors.

“I think we’re through the worst,’’ said Richard Tisei, an agent with Northrup Associates and president of the Eastern Middlesex Association of Realtors. “Houses that are priced correctly sell. We’ve had instances of multiple offers.’’

December sales in Essex County were up 4 percent from a year earlier, and up 2.5 percent in Middlesex County; statewide, the change was 3 percent. Many if not most of those buyers are taking advantage of the government’s $8,000 first-time home-buyer’s tax credit, now scheduled to end April 30 after a November deadline was extended, and a $6,500 incentive available to some others.

“That’s generated a very positive feeling,’’ Holmes said. “In fact, inventory is starting to get low. Back in October, we had 135 single-family homes on the market in the Newburyport area . . . and now we have 87.’’ For condos, there were 279 on the market in October, down to 207 at the end of January, Holmes said.

Most of the upswing seems to be in the less expensive homes, too, from $200,000 to $400,000, agents say, which supports the idea that first-time-buyer tax credits are powering much of the business. “On the high end, there’s not a lot of buyers,’’ said Bert Beaulieu, another Northrup agent, who is president of the North Shore Association of Realtors.

Median prices remain on the downswing in many communities. Newburyport saw a jump in single-family sales from 10 in December 2008 to 17 in December 2009, but also saw the median price drop nearly 20 percent, from $447,500 to $360,000, according to the Warren Group, a Boston real estate publisher. Measured year to year, the drop was still 12 percent.

You can slice and dice the numbers almost infinitely, analyzing everything from income levels to foreclosure rates. Lawrence went from 17 sales in December 2008 to 16 in December 2009, but saw the median price rise nearly 10 percent, from $158,550 to $174,000, according to the Warren Group. Year to year, though, the city saw a 2 percent median price decline.

Most agents, though, said they have seen prices stabilizing in recent months, especially at the lower end. Proper pricing is key to selling a home in any town or market segment, they said.

“Realtors all along have been saying, ‘We can sell your house, but you have to listen to us on prices,’ ’’ notes Tim Warren, CEO of the Warren Group.

“The idea of going out there 20 percent over market [value] anymore is ridiculous,’’ said Sandy Berkenbush, a realtor and an owner of Stone Ridge Properties of Newburyport and Amesbury. “And it’s very condition-sensitive, as well as price-sensitive. And if you’ve got a wrong price, you’d better change it quicker rather than later.’’

Few expect another extension of the federal tax credits.

“I think people are going to be wondering what’s going to happen after April,’’ said David Turcotte of the department of regional economic and social development at the University of Massachusetts Lowell. “Usually, May and June are reasonably good months in real estate, but will you see a noticeable drop-off?’’

Some agents hope the good market will survive the end of the incentives. “I’m hopeful there’s going to be enough momentum by the end of April to push us into the late spring market,’’ said Berkenbush.

But most say the real fate of the market rests with the larger economy.

“Obviously, people’s anxiety about job security plays a big role in our marketplace,’’ notes Tisei.

“If we don’t see a major change in what’s going on with the jobs market, I think we’re definitely going to see a little slip-back there, at least temporarily, right after that tax incentive is over,’’ said Beaulieu.

“Really, most real estate folks aren’t thinking beyond [April] now,’’ UMass Lowell’s Turcotte said. “They’re thinking ‘We have an opportunity, we have this urgency, we have this three- or four-month window, and we need to go out there and market this urgency and try to get folks who are considering home-buying to get off the fence and actually get into the market and buy something.’ ’’

“When I talk to a lot of consumers out there today, I keep telling them this is the real estate trifecta,’’ said Beaulieu. “You’ve never seen prices as low as they are today in a long time. And the same thing with the interest rates. The interest rates are best we’ve seen . . . and you’ve got the government trying to help you get into these homes.’’

By Joel Brown Boston Globe February 18, 2010

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