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If you bought a home last spring, you may be underwater now

Posted by Scott Van Voorhis May 17, 2011 06:29 AM

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The home buyer tax credit expired just over a year ago. But we will be living with the fallout from this disastrous government gimmick for years to come.

Buyers who rushed to close a home last spring and collect their $8,000 check have already lost that money and then some, Smart Money notes.

The median home price across the country has dipped over the past year to $170,000 from $180,000 last spring. That means a loss of $15,000 for the average tax credit buyer – almost double what they earned through the $8,000 credit.

And those who rushed to buy homes last spring here in the Bay State aren’t looking that much better.

The average home buyer in our state has almost lost the entire value of that $8,000 credit, with the median home price, now at $273,475, having dropped more than $6,500, according to stats compiled by the Massachusetts Association of Realtors.

Still, home buyers in some towns have wound up faring far worse, especially in the middle of the market.

The average Billerica home buyer who cashed in on the $8,000 tax credit last spring has taken a $32,000 hit, with the town’s median home price having fallen to $287,450, The Warren Group reports.

In Dracut, the gap is even worse, with the median home price having plunged $62,000 to $218,000.

Can’t say my town of Natick has done much better. The median price has positively cratered since last spring, hitting $353,500, a decline of roughly $80,000, according to The Warren Group.

For anyone who bought a home in Natick last March, that's a loss of ten dollars in real estate value for every one dollar gained through the credit.

Absolutely brutal.

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

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

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