Local housing numbers show market on the mend
New real estate numbers show a housing market on the mend as single family home sales increased for the third straight month and prices slowed their rate of decline.
Statewide, there were 3,785 single-family homes bought in September, 4.5 percent more than during the same period last year, according to the Warren Group, a local company that publishes real estate data.
At the same time, the median selling price for single-family homes dropped 1.4 percent to $285,000 in September from the same month last year - the smallest drop in year-over-year prices in about two years, the Warren Group said.
Housing specialists attributed much of the sales increase to the $8,000 first-time home buyers federal tax credit that has prompted a flurry of sales as buyers scramble to close deals before the credit expires Nov 30.
Many in the real estate industry worry that the improved sales pace will fizzle if Congress fails to extend the credit into next year and the national unemployment rate worsens, as economists expect. Home builders and real estate associations have been lobbying lawmakers to extend or even expand the benefit.
"We are concerned that it will take longer and be more difficult for the market to stabilize without extending the federal tax credit for home buyers,'' said Gary Rogers, president of the Massachusetts Association of Realtors and a broker with RE/MAX First Realty in Waltham.
Nicolas Retsinas, director of Harvard University's Joint Center for Housing Studies, said stability in the housing market also is being spurred by the federal government's program to purchase mortgage-backed securities, which has kept interest rates at historic lows this year.
"There is still fragility to the market because the market is very dependent on the government,'' Retsinas said, adding it's unclear how long such programs "can be sustained."
Nationwide, seasonally adjusted home values increased for the third month in a row, according to new S&P/Case-Shiller Home Prices Indices data also released today.
Boston area home values - which have fallen less far than those in many others areas of the country - increased in August for the fourth consecutive month, according to Case-Shiller data. Case-Shiller is considered the best indicator of home prices because it measures repeat home sales.
"Boston and most of the country is looking better and feeling better,'' said David Blitzer, chairman of Standard and Poor's Index Committee, who warned that a stagnant economy and the end of the first-time home buyers tax credit could push values back down.
And despite the recent sales increases, prospective sellers in Massachusetts are still hesitant to put their homes on the market. Inventory of residential properties dropped 13 percent in September, compared with the same month last year - the 18 month of year-over-year decreases, the Massachusetts Association of Realtors reported. As of Sept. 30, there were 40,313 homes for sales in the state. That represents 6.9 months worth of supply, down from 10.2 months worth of supply in September 2008, the association said.
Jay Hummer, executive vice president for RE/MAX of New England, said he is optimistic that with or without a tax-credit extension more buyers will come out in the spring if the overall economy improves.
"There is still pent up demand,'' Hummer said.
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