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Lull before the next housing market storm?

Posted by Scott Van Voorhis March 31, 2010 06:34 AM

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The latest batch of national and local housing numbers is out.

And if you look beyond the gaudy year-over-year comparisons, which after all are based on gains over the grim winter of 2009, it's hard not to see trouble ahead for some, and maybe a few opportunities for others.

The housing market appears to be running out of gas, just as two major props, the home buyer tax credit and a key Fed program aimed at keeping mortgage rates low, are set to go poof.

Single-family home sales were up 14.3 percent this February over Febuary 2009, but are down about a percent over this January, continuing a pattern of month over month declines since last fall.

And the price numbers tell the story more dramatically.

The median home price in Massachusetts is up just 7.7 percent over last February, when fears of another Great Depression were rampant. And the median price of $271,950 actually fell more than 9 percent January's median price of $300,000.

Meanwhile, Case-Shiller, which tracks home prices in major markets across the country, reports a .3 percent increase in Boston area home values January over January 2009. But the overall housing picture remains mixed, according to the housing gurus who put out the respected market index.

Does this all mean happier hunting ahead for home buyers in Greater Boston?

Certainly the end of the tax credit come April 30th is likely to reduce the level of competition out there, especially for more modestly priced homes. Competition for homes below $400,000 has actually been brisk, fueled by a combination of the credit and a long-standing dearth of quality, well-priced homes in the Boston area.

Yet tomorrow, the Fed will pull the plug on its $1.25 trillion program of buying mortgage-backed bonds guaranteed by Freddie Mac and Fannie Mae, which has helped push interest rates to historic lows.

That certainly could certainly lead to a  rise in rates, though how fast and by how much remains to be seen.

This blog is not written or edited by Boston.com or the Boston Globe.
The author is solely responsible for the content.

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About boston real estate now
Scott Van Voorhis is a freelance writer who specializes in real estate and business issues.

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