Hot spring market suddenly goes cold
Is the real estate market catching its breath after watching sales soar earlier this spring or headed into another slump?
That's the big question after the release of some interesting numbers by the Massachusetts Association of Realtors.
A majority of local Realtors recently polled by the trade group reported a drop in sales activity in May.
Just under 40 percent said sales activity had dropped "somewhat" while another 20 percent reported a "significant" plunge in buyer/seller activity, MAR finds.
Needless to say, the sudden cool down in May comes after sales soared in March and April as first-time buyers rushed to cash in on the $8,000 home buyer tax credit before it expired.
MAR's new Realtor Market Index is also down, having fallen 23 percent in May from April to a total score of 39.49. The index is measured on scale of 100, with anything below 50 signaling a weaker market.
It's the first time in ten months the index has fallen month over month, though it's still up over May 2009.
It's pretty clear there is a post-tax-credit slow down taking shape here. But where it's all headed is a matter of debate.
To be fair, MAR contends the drop is temporary before lower prices and still low interest rates kick in to pick up demand.
I'm skeptical of that. It seems more akin to doing eighty in the passing lane on the highway and your engine stalling out. You had better hope that it kicks back in before you crash.
