A local agent takes a look at the market

Rona Fischman, a buyer's agent and contributor to the Boston.com Real Estate Now blog, chatted last week about the current buying market.

Q. How is the house market right now? Are house prices really down much? Are they equal to which year, 2006, 2005, 2004, so on?

A. It depends on where you are in the area. Some towns are down as much as 20 percent or more. Some are actually still going up. I just looked though the Warren data and the biggest losers and gainers are in the somewhat rural areas like Williamsburg, Whately, Bernardston, Chesterfield. Medford is down 6 percent this year, so far, that would bring it to 2006 levels. Braintree is down 9 percent this year. That puts them back to 2005, combined with the drop last year.

Q. I have recently seen places like Newton, Wellesley where price are still firm. How can I find deals in these areas? Is it workable?

A. To find the best places in high-end towns, you either need to be right on the spot, ready to jump, or look for places that other people have turned down for the wrong reason. Try to look beyond bad housekeeping, dirt, and smells. Most of the time, those leave with the sellers.

Q. How possible is it to get a decent single-family home for $350k? Will I have to live in a garbage pail if it's in Braintree, or will I have to move out to the boonies?

A. $350k is tough near Boston. In the area where I work (between Winchester and Natick, mostly north of Boston) there are homes off the beaten path that may do. Look for places not so close to mass transit. They tend to be cheaper. Consider an attached or town home. They may work.

Q. Is the current mortgage climate bringing more sellers out of the woodwork? And are these sellers being realistic about prices?

A. Some sellers have not gotten the message that we are in a declining market, overall. I have seen price drops over $150K on houses in the $600s and $700s. It is clear that overpricing is a bad tactic, but the optimistic sellers are still in denial.

Q. We are renters looking to buy. How harshly do sellers look at buyers using FHA financing? We are choosing to use an FHA loan because we don't want to put a big down payment down, not because we don't have the money. A family friend has told us that is why a low bid we put in was rejected. Should we rethink our financing strategy?

A. Most sellers think badly of FHA because it used to be really slow and bureaucratic. Most brokers know that it has improved and will tell the sellers so. If you will benefit from that program, go for it.

Q. I purchased a town house three years ago. I am interested in selling it to buy a single-family house. Is it better to keep the town house and continue to build equity, or sell at a loss and take advantage of lower housing prices?

A. It depends on whether you have funds to buy without selling, whether a fair rental will cover your costs, and if you are willing to be a landlord. Landlording is not too hard, if you have a nice place. If you are going to do it, take a class! There are some holes you can fall into. Right now, in most places, the market favors trading up because what you may lose in equity on the first (smaller) place is less than the reduction in equity on your trade-up. This balance is hurting our elders who want to sell their big houses and simplify.

Q. What are pros and cons of short sale?

A. The pros are you may save some money, maybe $10-30K. The cons are, you lose time, maybe your upfront costs and it hangs you up for months.