Spurred by low interest rates and a looming deadline for a federal tax credit, Massachusetts home buyers pushed single-family home sales up 45.8 percent in April, compared with the same month a year earlier, according to data released yesterday.
Condominium buyers also moved off the sidelines of the housing market in growing numbers, driving the number of sales up 55.7 percent in April to 1,831, from 1,176 during the same time last year, according to the Warren Group, a Boston company that tracks real estate data.
As sales surged, median prices also increased, but more modestly.
Median prices for single-family homes in April rose 7.1 percent to $285,000, while condo prices went up 5.5 percent to $253,000, compared with the same month in 2009, the Warren Group said.
But despite the strong data, many questions remain about what’s ahead for the housing market.
Nicolas Retsinas, director of Harvard University’s Joint Center for Housing Studies, likened the market to a sick patient being taken off life support, thanks to a strong dose of federal intervention — the situation has improved, he said, but there is still healing to be done. “It doesn’t look like the patient is going to run a marathon,’’ Retsinas said.
Barry Bluestone, dean of the School of Public Policy and Urban Affairs at Northeastern University, said many home buyers fast-tracked their purchases this spring to qualify for the federal tax credit.
“It will be interesting to see what happens in May,’’ he said, with government assistance coming to an end.
To qualify for the credit, buyers had to have a binding contract before May 1 and close on the home by June 30. It provides $8,000 for first-time homebuyers and $6,500 for new purchases by eligible longtime homeowners.
The real estate market’s recovery could also be stunted by a growing number of foreclosures, potentially flooding the market with low-cost homes and eroding consumer confidence.
But there are some indicators that might encourage home sales in the Boston area.
For instance, the state’s unemployment rate is slowly falling, and mortgage interest rates remain low. In addition, housing inventory for single-family homes has increased for two consecutive months, providing more choices for prospective buyers, according to data released yesterday by the Massachusetts Association of Realtors.
The S&P/Case-Shiller Home Price Indices also released data yesterday, reporting that 13 of 20 metropolitan areas nationwide showed price declines in March, compared with February.
Boston-area values remained flat during that period, although they were up 3.8 percent compared with the same time last year.
And David Blitzer, chairman of the Index Committee at Standard & Poor’s, said that despite improvements in home prices from last year, new data and the expiration of the tax credit point to an overall market weakening, at least in the short term.
“We don’t expect to see a boost in relative demand,’’ Blitzer said.
Jenifer B. McKim Boston Globe May 26, 2010
2 comments:
Hey guys, I just wanted to compare some notes. In Nashville we saw a pretty good price bump from Feb-May, but soon after the tax credit expired we gave back those increases. However, the volume of sales is still quite high. Are you guys seeing the same thing in Mass?
Sales definitely went up in Massachusetts, but have now dropped to summer levels.
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