Massachusetts home and condominium sales rose sharply in May, lifted by a federal tax credit for home buyers that is being phased out, the Massachusetts Association of Realtors reported this morning.
According to the association, the Massachusetts housing market had its largest May increase since the association began tracking monthly data. The big question, of course, is what will happen to the market when the tax credit is no longer providing an incentive to potential home buyers.
In any case, there were 3,911 detached single-family homes sold in the Bay State this May, a 31.5 percent increase from the 2,975 homes sold the same time last year, the association said in a press release.
The median selling price for single-family homes in May was $299,000, a 4 percent increase when compared with $287,500 in May 2009; it was the seventh straight month of year-over-year gains, the association said.
The May condominium market in Massachusetts was up 32.4 percent to 1,635 units sold. In May 2009, there were 1,235 units sold. Condominium median selling prices in May were down 1.1 percent from $265,000 in 2009 to $262,000 in May 2010, the first drop after five straight months of year-over-year gains, the association said.
"May is the first month with closings that came from contracts signed in April, the final month to qualify for the home buyer tax credit,” association president Kevin Sears said in a statement. “However, some buyers who previously met all the qualifications for the tax credit might not be able to close by the June 30th closing deadline for various reasons. We urge Congress to immediately extend the tax credit deadline for those buyers already in the pipeline. It would be terrible for those buyers if they were not able to complete the purchase in time to claim the credit.”
The Warren Group, a Boston firm that tracks real estate activity, issued a separate report on the local housing market. The report included a statement from the firm's chief executive, Timothy M. Warren Jr.
“The increase in May sales volume isn’t a huge surprise," Timothy Warren said. "The residential real estate market is still feeling the effects of the homebuyer tax credit because buyers who want to take advantage of the expired tax credit have until the end of June to close their deals.”
Boston Globe June 22, 2010