Massachusetts Home Buyer Guide

Many Homes Assessed Too High

As many as 60 percent of U.S. homes may be assessed too high, according to the National Taxpayers Union, but most homeowners don't know how the process works or that they can appeal their tax assessment, The Boston Globe reported June 11, 2009.

Depending on your municipalities last assessment, your property's assessed value may be out of date. You are likely to have more success now appealing your tax assessment, because in most areas there is a large disparity between assessed values from the real estate boom years and the current depressed market values.

In Massachusetts, the appeal is called an abatement of real estate taxes. Abatement applications are available at all city and town assessors office, or online.

The Massachusetts state Web site has a Web page with tax abatement tips.

Read The Boston Globe Article

Haverhill, MA Condos Sales, Price Drop Q1

This year’s first quarter sales of Haverhill, Massachusetts condominiums were down 18.5 percent from Q1 2008, and down more than 50 percent from 2007.  In 2007 eighty-nine condos sold during the first quarter, but in the first 3 months of this year only forty-four condos sold. 

The median selling price for condos in Haverhill, MA fell 21.79 percent to $140,000 compared to Q1 2008, when the median price was $179,000.  During the first quarter of 2006, the median condo price was $224,125, making this year’s Q1 price 37.53 percent lower than three years ago. 

Haverhill condominiums were on the market fewer days last quarter than in Q1 2008, on average.  This year condos averaged 212 days on the market.  Compared to 243 days during the first quarter of 2008, condos spent an average of 12.76 percent less time on the market.  

This data is comes from MLS Property Information Network, Inc.

Haverhill, MA Condominium Real Estate Data

                    Median Price    Number of Sales    Days on the Market

Q1 2006:        $224,125                     86                                 115
Q1 2007:        $217,000                     89                                 155
Q1 2008:        $179,000                      54                                 243
Q1 2009:        $140,000                     44                                 212

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Many Proposals To Extend, Increase Tax Credit

There seems to be more than a little support for extending and/or increasing the tax credit for first-time home buyers, USA Today reported June 23, 2009.

One proposal calls for expanding the tax credit to $15,000 from the current $8,000 and eliminating any income restrictions. That same proposal would eliminate the first-time home buyer requirement.

Another proposal would extend the current tax credit to all home buyers through 2010.

Read The USA Today Article

U.S. Existing Home Sales Declined In May

U.S. existing home sales declined 3.6 percent in May compared to May 2008, but increased 2.4 percent compared to April 2009, the National Association of REALTORS® (NAR) reported June 23, 2009.

Existing homes include single-family houses, townhouses, condominiums and co-ops.

Total housing inventory at the end of May fell 3.5 percent to 3.80 million existing homes available for sale across the U.S., an amount that represents a 9.6-month supply at the current sales pace and down from a 10.1-month supply in April 2009.

The national median existing home price for all housing types was $173,000 in May, down 16.8 percent from a year earlier. Distressed properties (bank owned and short sales), which declined to 33 percent of all sales in May from 45 percent in April, continued to downwardly distort the median price because such properties generally sell at a discount relative to non-distressed homes.

Existing home sales in the Northeast rose 3.9 percent to an annual level of 800,000 in May 2009 compared to April 2009, but were 10.1 percent below a year ago. The median price in the Northeast was $243,600, a 12.5 percent decline from May 2008.

Existing home sales in the Midwest jumped 9 percent in May, but were 4.4 percent below May 2008. The median price in the Midwest was $145,800, a 10.4 percent drop from a year ago.

In the South, existing home sales were unchanged in May, but were 8.9 percent below a year ago. The median price in the South was $157,400, down 9.9 percent from May 2008.

Existing home sales in the West slipped 0.9 percent in May compared to April, but were 11.8 percent higher than May 2008. The median price in the West was $197,700, down 30.6 percent from a year ago.

Warren Group Reports MA Sales, Prices Decline

Single-family home sales and median home prices in Massachusetts continued to decline in May; however, the rate of decline in monthly median home prices moderated, The Warren Group, publisher of Banker & Tradesman, reported June 23, 2009

The Massachusetts Association of REALTORS® reported similar Massachusetts housing numbers.

 “This report shows that home sales are still slow in Massachusetts. In the late 1990s and into the early part of this century, the state was averaging over 5,000 single-family home sales during the month of May. Last month, we saw fewer than 3,300 home sales, making it the lowest sales pace for the month of May in almost two decades,” said Timothy M. Warren Jr., CEO of The Warren Group.

There were 3,256 single-family home sales in May, down 13.1 percent from 3,749 in May 2008. Single-family home sales recorded from January through May slid 12.5 percent to 12,128 from 13,857 during the same months in 2008.

The sale of foreclosed properties has become a larger share of the residential real estate market in Massachusetts this year. Bank-owned property sales have made up 7.6 percent of all single-family home sales transactions, so far this year. A total of 923 of the single-family homes sold from January through May were owned by banks and other lending institutions. That is an increase from 5.2 percent during the same months last year when only 723 single-family home sales were of bank-owned properties.

The median selling price for homes dipped 13 percent to $280,000 from $322,000 in May 2008. May’s 13 percent decline in median home prices year-over-year is the smallest in the last nine months. The year-to-date median home price retreated 15.1 percent to $264,900 from $312,000.

“Sure, it’s a positive sign that the drop in monthly median home and condo prices year-over-year is the smallest it’s been in months, but prices are still declining. In order for that downward trend to reverse, sales must improve significantly. That won’t happen unless the employment outlook improves dramatically and the tight mortgage lending standards are loosened,” Warren said.

Warren also pointed out that distressed property sales put downward pressure on home prices this year. The year-to-date median home price would have been $290,000 -- $25,100 higher -- without the bank-owned property sales.

Monthly condominium sales and median prices also declined by double-digit percentages compared to a year ago. Condo sales plummeted 22 percent to 1,567 from 2,010 in May 2008. May was the seventh consecutive month that monthly condominium sales were down by more than 20 percent year-over-year. A total of 5,545 condos traded in the first five months of the year, down 26.6 percent from 7,553 last year.

The median condo price slipped 10.4 percent to $257,000 in May from $287,000 during the same month last year. It was the smallest year-over-year drop in monthly median home prices in the last seven months. Year-to-date, the median condo price has fallen 13.3 percent to $235,000 from $271,000.

MA Home Sales, Median Price Decline In May

The median price of a single-family home in Massachusetts declined 11.8 percent in May compared to May 2008, and single-family sales dropped 15.3 percent during the same period, The Massachusetts Association of REALTORS reported June 23, 2009.

I must admit, I expected the sales numbers to be much better, either flat or slightly higher on a year-over-year basis. The decline in median price does not surprise me.

Why? Everyone I speak with is busy, including other agents, home inspectors and mortgage professionals. Sure, the mortgage people were busy with refinances, but many told that home purchases were up too. The median home price decline is not surprising considering so many of the bank-owned properties are in such horrible shape. Those properties are playing a major role in dragging prices down in some communities.

The median condo price declined 6.2 percent in May compared to May 2009. Median home prices for single-family homes and condominiums have experienced month-to-month gains for the last three and four months respectively.

There were 2,972 detached single-family homes sold this May, a 15.3 percent decrease from the 3,510 homes sold the same time last year. On a month-to-month basis, home sales were up 21.4 percent from 2,448 homes sold in April 2009.

The median selling price for single-family homes in May was $284,000, a decrease of 11.8 percent compared to $322,000 in May 2008.  Despite the decrease, this is the highest median price since October 2008.  In addition, the May median price is up 12 percent from the 2009 low of $252,500 in February. On a month-to-month basis, the May median selling price was up 3.3 percent from $275,000 in April 2009.  This is the third straight month of month-to-month increases.  The May median selling price is now back to more affordable 2003 levels.              

The condominium market experienced a significant decrease of 24.6 percent in the number of units sold this May compared to the same time last year (1,640 units sold in 2008 compared to 1,236 units sold in 2009); however, on a month-to-month basis, condominium sales were up 34.9 percent compared to the 916 units sold in April 2009.  May was the fourth straight month of month-to-month increases.   

Condominium median selling prices in May were down 6.2 percent from $282,500 in 2008 to $265,000 in 2009; however, May's median condo price is the highest median price since August 2008.  The May median price is up 30 percent from the 2009 low of $204,000 January. On a month-to-month basis, the median selling price of a condominium was up 12.3 percent from an April 2009 median price of $236,000.  The May median selling price for a condominium is now back to 2005 levels.

The number of single-family homes put under agreement in May was down 5 percent compared to the same time last year (5,059 homes in 2008 to 4,802 homes in 2009).  On a month-to-month basis, single-family homes put under agreement were up 7.2 percent from 4,480 homes in April.  The number of condos put under agreement in May was down 6 percent compared to May 2008 (2,147 units in 2008 to 2,025 units in 2009).  On a month-to-month basis, condos put under agreement were up 7.2 percent from 1,878 units in April. Pending sales or “under agreements” are homes that have a signed purchase and sale agreement, but have yet to close and be recorded.

The inventory of residential properties on the market in Massachusetts as of May 31, 2009 decreased 17 percent compared to the same time last year (from 50,537 listings in 2008 to 41,770 listings in 2009).  At the current sales pace, this represents approximately 12.4 months of supply, up from 9.8 months of supply in May 2008.  On a month-to-month basis, the average months of supply is up slightly from 12.1 months in April.  It is considered a balanced market when there are between 7.5 and 8.5 months of supply.

The inventory of single-family homes decreased 17 percent from May 2008 (35,012 listings in 2008 to 29,210 listings in 2009). to 11.9 months of supply in May 2009.  

The condominium market saw May inventory decrease by 19 percent from last year (15,525 listings in 2008 to 12,560 listings in 2009), to 13.7 months of supply in May 2009.

Detached single-family homes stayed on the market an average of 148 days in May 2009 compared to an average of 143 days in May 2008, while condos stayed on the market an average of 149 days, up from an average of 135 days in May 2008. 

I question the usefulness of the data for days on the market due to the length of time it takes to close short sales. Some listing agents place the short sales "under agreement" on the MLS when an offer is accepted. Some listing agents just flag the property as having an accepted offer, thus continuing to accumulate days on the market. Other agents just keep the property "active" on the MLS until the lender approves the short sale. That can take many months.

Billerica, MA Median Home Price, Sales Decline Q1

In Billerica, Massachusetts, 37 single-family homes sold during the first quarter of this year compared to 56 sales during the same quarter of 2008, decline of 51.35 percent.  

During the first quarter of 2007 Billerica, MA recorded 75 sales of single-family residences, which is 102.7 percent more than Q1 2009.

Compared to Q1 2008, the median selling price of Billerica single-family properties fell by 18.16 percent to $300,000 in Q1 2009.  The first quarter median home price was $366,555 in 2008.

The average number of days on the market during the first quarter of 2009 was 15.91 percent shorter than in Q1 2008.  Single-family homes in Billerica averaged 148 days on the market, compared with 176 during the same quarter of 2008.  In 2006, Billerica single-family properties averaged only 103 days on the market during the first quarter.

This data comes from MLS Property Information Network, Inc.

Billerica, MA Real Estate Market Data

                   Median Price    Number of Sales    Days on the Market

Q1 2006:        $345,000                     55                                 103 
Q1 2007:        $385,485                     75                                 159
Q1 2008:        $366,555                      56                                 176
Q1 2009:        $300,000                     37                                 148

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Brookline, MA Median Price Increases Q1, Sales Drop

Last quarter, the median price of a single-family home in Brookline, Massachusetts was up 10.41 percent compared to Q1 2008, when the median price was $1,105,000.  With a median price of $1,220,000, this year’s Q1 median was the highest it’s been during the first quarter over the previous four years.

While Brookline, MA prices were resistant to the price downturn, sales dropped dramatically compared to the first quarter of 2008.  Twenty single-family properties sold during Q1 2008, while this year’s first quarter saw only 9 sales, a decline of 55 percent.  During the first quarters of 2007 and 2006, single-family sales in Brookline counted 41 and 31, respectively.

The average number of days on the market for Brookline single-family homes was 21 percent fewer last quarter than the same statistic for 2008.  Between January and April, homes in Brookline spent only 79 days on the market, on average.  Last year, homes that sold during that time frame averaged 100 days on the market, and in Q1 2007 they spent an average of 175 days on the market.

This data comes from MLS Property Information Network, Inc.

Brookline Real Estate Market Data

                  Median Price    Number of Sales    Days on the Market
Q1 2006:        $1,000,000                  31                                 153
Q1 2007:        $   959,500                  41                                 175
Q1 2008:        $1,105,000                  20                                 100
Q1 2009:        $1,220,000                    9                                  79

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Tax Credit Can't Be Used For Down Payment

There has been some confusion recently by consumers who have been led to believe that they can use the $8,000 first-time home buyer tax credit for their down payment to buy a home.

Home buyers cannot use the $8,000 tax credit for their down payment.

There is a way to use the tax credit to cover closing costs.

The U.S. Department of Housing & Urban Department (HUD) announced May 29, 2009 that FHA-approved lenders may develop bridge-loan products that enable first-time home buyers to use the benefits of the federal $8,000 first-time home buyer tax credit for closing costs.

FHA-approved lenders can develop bridge loans that home buyers can use to help cover their closing costs, buy down their interest rate, or put down more than the minimum 3.5 percent required by FHA.

The bridge loans can't be used to cover the minimum 3.5 percent down payment.

Home buyers applying for FHA-backed financing with an FHA-approved lender that offers a bridge-loan program can get a bridge loan to bring down the upfront costs of buying a home significantly, but would still have to come up with the minimum 3.5 percent down payment.

Download First_Time_Home_Buyer_Tax_Credit_Brochure

HUD Press Release

Methuen Home Sales Plummet, Median Price Drops

Sales of single-family properties in Methuen, Massachusetts fell to 39 last quarter, a 43.48 percent decline from Q1 2008.  The number of sales during the first quarters of 2006 and 2008 were 68 and 69, respectively; however, compared to the 87 single-family homes sold during the first months of 2007, this year’s Q1 sales were 55.17 percent fewer. 

In Methuen, MA, the median price of single-family homes last quarter was $241,500.  Compared to last year’s Q1 median of $287,000, the median price has fallen by 15.85 percent.  The first quarter median prices had been $320,000 and $299,900 during 2006 and 2007, making last quarter’s median 24.53 percent less than that of three years prior.

The average number of days on the market for Methuen single-family properties that sold during the first quarter is slightly greater than last year.  This year, homes averaged 143 days on the market, which is just over 9 percent longer than last year’s average of 131.  The difference in averages between Q1 2009 and Q1 2007 is even smaller, with this year’s average being only 1.42 percent more than the Q1 2007 average of 141 days.

The data comes from MLS Property Information Network, Inc.

Methuen, MA Real Estate Market Data

             Median Price    Number of Sales    Days on the Market

Q1 2006:        $320,000                      68                                 108 
Q1 2007:        $299,900                      87                                 141
Q1 2008:        $287,000                       69                                 131
Q1 2009:        $241,500                      39                                 143

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Boxford, MA Home Sales Up, Median Price Drops Q1

This year’s first quarter sales are up for Boxford, Massachusetts single-family homes. With only 9 sales during the first three months of 2008, Boxford, MA recorded 13 sales and a gain of 44.44 percent last quarter. Boxford’s single-family home sales during Q1 2009 were only 13.33 percent lower than during Q1 2007.

The median price of single-family properties in Boxford, MA dropped to $483,450 in the first quarter of 2009. As compared to last year’s Q1 median of $599,000, the median price of a home declined 19.29 percent. Median home prices fell more drastically between Q1 2007 and Q1 2008, when the Q1 2007 median of $850,000 decreased by 29.53 percent.

In Boxford, single-family homes averaged almost 100 days longer on the market last quarter than they did in Q1 2008. Homes sold during the first quarter of 2008 averaged 184 days on the market, but during the first quarter of this year they averaged 270. Last quarter’s average was only 11.57 percent greater than in Q1 2007, when single-family properties averaged 242 days on the market.

This data comes from MLS Property Information Network, Inc.

Boxford, MA Real Estate Market Data

               Median Price     Number of Sales      Days on the Market
Q1 2006:   $572,450                      16                             210
Q1 2007:   $850,000                      15                             242
Q1 2008:   $599,000                        9                             184
Q1 2009:   $483,450                      13                             270

Bill Would Increase $8K Tax Credit To $15K

U.S. News & World Report's The Home Front blog reported June 12, 2009 that Georgia Republican U.S. Senator and former real estate professional Johnny Isakson filed a bill June 10, 2009 that would expand the current first-time home buyer tax credit from $8,000 to $15,000.

Besides the increased tax credit, it could be taken by anyone who buys a primary residence, instead of only by first-time home buyers.

The bill would also remove the income limits. Presently, the tax credit amount is reduced for buyers with a modified adjusted gross income (MAGI) of more than $75,000 for single taxpayers and $150,000 for married taxpayers filing a joint return. The tax credit amount is reduced to zero for taxpayers with MAGI of more than $95,000 (single) or $170,000 (married) and is reduced proportionally for taxpayers with MAGIs between these amounts.

The credit would be available for one year following the enactment under Sen. Isakson's bill.

I think the bill should be retroactive by two to three months, so it doesn't put the brakes on deals because home buyers think they'll receive an extra $7K by waiting. In addition, now that the bill has been filed, it should be voted up or down quickly, so home-buying decisions are not put on hold while the bill is pending.

“'The first-time homebuyer tax credit has made a difference,' said Isakson in a statement. 'First-time homebuyers used it and the market stabilized, but we don't have a recession in first-time home buyers. We have a recession in the move-up market. One of the biggest problems facing the American people today is an illiquid housing market, a decline in their equity, a decline in their net worth and a depression in the housing market that we are obligated to correct if we possibly can.'”

Read The Home Front Post

Canton, MA Median Home Price Declines May 2009

May single-family home sales have remained steady in Canton, Massachusetts over the past several years, with 13 sales each in 2006, 2007 and 2009, and 14 sales in May 2008.

The median price of a single family home in Canton was $475,000 in May 2007, a 6.7 percent increase from May 2006. The following May median prices fell by 6.3 percent to $445,950.Comparing May 2009 and May 2008, the median price again dropped, falling by 14.6 percent to $380,000.

The average length of time on the market for single family homes in Canton follows the same pattern as the number of sales. The number of days remained fairly constant during the month of May, with 146 days in 2006, 150 in 2007, 100 in 2008 and 148 in May 2009

This data comes from MLS Property Information Network, Inc.

Less Than Six Months Left For $8K Tax Credit

Just a reminder that qualified first-time home buyers have less than six months to search for a home, find a home, come to an agreement with a seller and close the deal before the federal $8K tax credit expires on December 1, 2009.

Get all the details of the $8K tax credit.

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Court Ruling Halts Many MA Foreclosure Sales

A Springfield, MA Land Court judge's recent ruling has resulted in many sales of bank-owned properties being halted.

The judge ruled that due to improper paperwork two banks improperly foreclosed on two Springfield-area homes; therefore, the title to these properties is "clouded" or defective.

The decision effects the sale of many bank-owned properties in Massachusetts. It has effected one transaction of mine.

Read more about this at MassForeclosed.com.