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Pending home sales drop as tax credit ends

By Jenifer B. McKim
Globe Staff / June 3, 2010

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The number of pending Massachusetts home sales slipped in May, compared with the same month last year, as buyers lost a sense of urgency following the expiration of a federal tax credit intended to spur sales.

Pending single-family home sales fell 3 percent and condominium sales dropped 6 percent last month, compared with May 2009, according to data released by the Massachusetts Association of Realtors. Pending sales are measured by signed purchase and sales agreements and are considered an indicator of where the housing market might be headed.

May was the first month since last July in which the number of pending sales — both condos and single-family homes — decreased compared with the year before, the association said. April 30 was the last day for buyers to enter into a binding contract to qualify for the federal tax credit. It provided $8,000 for first-time home buyers and $6,500 for new purchases by eligible longtime homeowners.

“The decrease in pending sales in May is a direct result of buyers making a final push to get homes under agreement’’ by the credit deadline, said Kevin Sears, a Springfield real estate broker and the association’s president.

Lisa Johnson Sevajian, a North Andover real estate agent, said the lower-end market has slowed, but homes priced at between $400,000 and $600,000 are moving more quickly. “Buyers are definitely not feeling the pressure they were four weeks ago,’’ she said.

Laura Schindler, an agent in Wellesley, said waning urgency to buy, coupled with a lack of inventory, is depressing sales in the $700,000 to $1.2 million range. “I have people who are waiting for nice houses to come on’’ the market, Schindler said. “If they don’t see something they like, they wait.’’

Some agents are trying to motivate buyers with added incentives now that the tax credit is no longer a possibility, said Alex Kupelian, owner of BrokerKing Realty in Watertown. “I offer 20 percent of my commission to my home buyer clients toward their closing costs,’’ he said. “I am not the only one offering incentives.’’

Jenifer B. McKim can be reached at jmckim@globe.com.