A whiff of revival in northeast US homes
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Reuters
Oluşturulma Tarihi: Nisan 23, 2009 00:00
SOMERVILLE, Mass. - The housing market in the Northeast United States faces growing interest for home showings following a distress of one year, but people are not decided to purchase yet. Spring may be a hope for sales, according to real estate brokers
After one of the worst slumps in memory, the housing market in the Northeast United States is stirring to life with more buyers on the prowl and bigger crowds at home showings.
But few are in a rush to buy and many of those willing to spend find it hard to get mortgages, suggesting a strong recovery is still some way off and those hoping for a swift return to the go-go days will be disappointed.
Many home-buyers are like 26-year-old Jessica Doctoroff, who is taking her time as she hunts for her first home in the densely populated neighborhoods around Somerville, a middle-class Massachusetts city that neighbors Boston.
After years of renting and living with roommates, the insurance manager wants her own home and is ready to buy. She's viewed about 20 condominium apartments since February and has seen plenty of bargains get even better.
One two-bedroom apartment had its price cut by $25,000 and another was reduced just 10 days on the market.
"I don't feel like there is a rush," she said after viewing a 1,177-sq-ft (109-sq-m) two-bedroom apartment priced at $499,000. "There's a lot more people coming out to look at these places, that's true, but there's a lot more property on the market."
Massachusetts was one of the frothiest markets in the boom. In the first quarter of 2000, the state ranked first in the pace of year-on-year house price rises in the country. And from 1995 to 2004, home sales notched double-digit growth.
Hammered by recession
But the recession is hammering the region. Home sales fell by 11 percent year-over-year in February in Massachusetts, 15 percent in neighboring Rhode Island, 22 percent in Maine and 26 percent in Connecticut, according to the Federal Reserve's "Beige Book" survey of economic conditions released last week.
Home prices fared even worse. The median price of a home in those four states plus New Hampshire fell 17 percent or more year-over-year, including a 26 percent drop in Rhode Island where the unemployment rate has scaled double digits.
Real-estate brokers agree those numbers are dismal but say several factors may turn the tide -- from low prices to low interest rates and a new-homebuyer tax credit. Mother Nature also could help as warmer weather and sunshine draw bigger crowds to home showings after an unusually cold winter.
Expectations are high for a spring thaw in sales. "It's definitely getting better," said real-estate broker Stephen Bremis of Bremis Realty in Somerville. Attendance at the home showings he organizes has nearly doubled since February. He sold two houses in three days last week.
He said buyers are responding to a drop in interest rates that has pushed the national average on a 30-year fixed-rate loan to around 4.85 percent, the lowest on record, along with a tax credit of up to $8,000 for qualified first-time buyers, part of the federal housing rescue plan passed in February.
Some banks are also offering unprecedented incentives, like money for closing costs to unload foreclosed properties. Brokers point to other positive signs such as a rise in Massachusetts condominium sales and prices in February compared to the previous month, according to the Fed's Beige Book.
But few are in a rush to buy and many of those willing to spend find it hard to get mortgages, suggesting a strong recovery is still some way off and those hoping for a swift return to the go-go days will be disappointed.
Many home-buyers are like 26-year-old Jessica Doctoroff, who is taking her time as she hunts for her first home in the densely populated neighborhoods around Somerville, a middle-class Massachusetts city that neighbors Boston.
After years of renting and living with roommates, the insurance manager wants her own home and is ready to buy. She's viewed about 20 condominium apartments since February and has seen plenty of bargains get even better.
One two-bedroom apartment had its price cut by $25,000 and another was reduced just 10 days on the market.
"I don't feel like there is a rush," she said after viewing a 1,177-sq-ft (109-sq-m) two-bedroom apartment priced at $499,000. "There's a lot more people coming out to look at these places, that's true, but there's a lot more property on the market."
Massachusetts was one of the frothiest markets in the boom. In the first quarter of 2000, the state ranked first in the pace of year-on-year house price rises in the country. And from 1995 to 2004, home sales notched double-digit growth.
Hammered by recession
But the recession is hammering the region. Home sales fell by 11 percent year-over-year in February in Massachusetts, 15 percent in neighboring Rhode Island, 22 percent in Maine and 26 percent in Connecticut, according to the Federal Reserve's "Beige Book" survey of economic conditions released last week.
Home prices fared even worse. The median price of a home in those four states plus New Hampshire fell 17 percent or more year-over-year, including a 26 percent drop in Rhode Island where the unemployment rate has scaled double digits.
Real-estate brokers agree those numbers are dismal but say several factors may turn the tide -- from low prices to low interest rates and a new-homebuyer tax credit. Mother Nature also could help as warmer weather and sunshine draw bigger crowds to home showings after an unusually cold winter.
Expectations are high for a spring thaw in sales. "It's definitely getting better," said real-estate broker Stephen Bremis of Bremis Realty in Somerville. Attendance at the home showings he organizes has nearly doubled since February. He sold two houses in three days last week.
He said buyers are responding to a drop in interest rates that has pushed the national average on a 30-year fixed-rate loan to around 4.85 percent, the lowest on record, along with a tax credit of up to $8,000 for qualified first-time buyers, part of the federal housing rescue plan passed in February.
Some banks are also offering unprecedented incentives, like money for closing costs to unload foreclosed properties. Brokers point to other positive signs such as a rise in Massachusetts condominium sales and prices in February compared to the previous month, according to the Fed's Beige Book.