Little immediate relief in sight for housing market
A metric that seeks to project a forward-looking snapshot of the local housing market showed few signs of relief for a slump partly kicked off by the recent expiration of a temporary federal tax credit for home buyers.
In September, pending sales for Bay State single-family homes fell 19 percent in September when compared with September 2009, the Massachusetts Association of Realtors said today; pending sales for condos were down 27 percent on a year-to-year basis.
The association's pending sales analysis counts homes that have been put under agreement but are not yet completed sales. Often six weeks can elapse between the time a home is put under agreement and the time that the sale closes. In general, economists look at closed home sales when they seek to evaluate the condition of the market, but those data points can be several weeks old. According to the association, pending sales can give more of a real-time indication of where the market might be heading.
“Concerns over the economy and unemployment continued to keep a number of potential home buyers on the sidelines as homes put under agreement went down compared to the same time last year when buyers were trying to qualify for the initial home buyer tax credit deadline,” association president Kevin Sears said in a statement. “While the market still favors the buyer and interest rates remain historically low, confidence in the market plays a significant factor even for the most qualified buyers when it comes to purchasing a home.”
In September, 3,609 single-family homes were put under agreement compared with 4,473 homes in the same month a year ago, the Massachusetts Association of Realtors said. September 2010 was the fifth straight month that year-over-year pending sales have gone down.
As for condos, 1,267 units were put under agreement last month, compared 1,725 units in 2009.
The pending sales results for September were roughly trending in line with the volume declines that were reported for closed home sales in August. To read a Globe story on closed August home sales, please click here.
That story noted: "The decline in sales was expected, given the surge in previous months as buyers rushed to take advantage of an expiring federal tax credit of up to $8,000. With the distortions caused by the tax credit, analysts said, it is unclear where the local housing market is heading."