NEWBURYPORT — October real estate data released this week shows hopeful signs regarding Bay State real estate trends, but the good news is not sustainable, according to a regional home sales tracking agency.
The data released by The Warren Group, an organization that tracks real estate trends statewide, shows home sale prices have gone down and sales up for the second month straight.
"I think sellers got real about what will sell, and people bought," Publisher Vincent Valvo said. "It did show there was a beginning of a recovery in Massachusetts, but, honestly, people got in the car, backed out of the driveway, went a couple of blocks, and then ran over the tire spikes and got a flat. Now we have to start all over again."
Valvo noted the data reflects purchase decisions made in August.
"During the last recession, we saw this trend for eight months," Valvo said. "But this time, the economy meltdown and Wall Street happened at the beginning of October and everyone is wondering if they will even have a job next week or a bank to go to, so they aren't going to go out and make one of the biggest purchases of their lives."
Locally, Stoneridge Properties Real Estate agent Jerry Lischke says he has seen activity go up.
"If you look at what's happening here, single-family homes and condos in Newburyport and Amesbury from Aug. 25 to today, there are 18 under agreement," Lischke said. "From June through August there were only five. There is a distinct uptick."
Lischke said in simplistic forms, the data reflects prices coming down and sales picking up, but he has noticed more first-time home buyers than ever driving the market forward.
"One thing that might lead to lowering the median prices is that most sales in the past six months have been entry-level sales," Lischke said. "They haven't been moves of choice where someone is moving from a $500,000 house to a $700,000 one. It is young couples, getting married who can buy now with the interest rates being decent."
Lischke also said he has seen those relocating to be near grandchildren, etc., also driving the sales.
"Year to date, the median sales price in Newburyport is $452,000, the exact same it was January through October in 2007," Lischke said. "So across the state it's not that medians have come down, it's that people are buying the ones at $350,000 or more of the less expensive houses, which is contributing to the downward spiral."
An additional housing report from the Massachusetts Association of Realtors was also released this week. The Warren Group and the Massachusetts Association of Realtors use different methods to track local housing activity.
Last month, the median selling price of a single family home in the state was $294,950, 10.6 percent below the median price of $330,000 in October 2007 and approximately the same as the median in September 2008, according to the Association of Realtors. The number of single-family Massachusetts homes sold in October rose 6.6 percent to 3,250 from 3,049 in October 2007, the Association said.
Massachusetts condominiums also dropped; the October median price was $250,000, down 10.7 percent from $279,950 in October 2007 and down 2 percent from $255,000 in September 2008.
Last month, 1,296 condos were sold in the state, down 1 percent from 1,309 condos sold in October 2007, the Association said.
Bob Licare, senior loan officer for Bank of New England, says now is the time to buy.
He said this week's announcement that the Fed will start purchasing mortgage-backed securities from Fannie Mae, Freddie Mac and Ginnie Mae will help lower home loan rates and keep them low.
"We had a huge drop in interest rates," Licare said. "The '30-year-fixed' interest rates are back in the mid-low 5 percents. People feel like this is great time to buy."
Licare said although times are tough and many have lost money, people see a greater return on their investment by purchasing real estate.
"Home prices are low, and people have a large number of properties to choose from," Licare said. "Interest rates are historically low. If you were ever contemplating the idea of home ownership, now is the time. Banks are lending, but credit is important, and you must show the ability to repay the loan...novel idea."
Licare also noted home buyers have options with as little as a three percent down payment with an FHA loan.
"Investors are feeling that home prices may not go any lower and values will start to 'appreciate' now that the demand is picking up," Licare said. "Many investors that have been sitting patiently on the sidelines for 'the bottom' in home prices are now jumping into the game."
Lischke advises perspective home buyers to think of homes as a shelter, one of the basic necessities rather than an asset.
He also said a movement back to the "old rules" with tighter standards in order to get a loan may be beneficial to all.
"You need good credit, a down payment and to make a prudent, conservative decision," Lischke said. "You buy real estate for long-term capital, not a way to get rich quick; it's a shelter for your family."
Local Data
Amesbury
20072008% change
October Sales118-27.27%
YTD Sales11876-35.59%
October Median Price290,000295,0001.72%
YTD Median Price349,950273,500-21.85%
Newburyport
20072008% change
October Sales1514-6.67%
YTD Sales157136-13.38%
October Median Price535,000375,000-29.91%
YTD Median Price452,000452,0000.00%
Rowley 20072008% change
October Sales31-66.67%
YTD Sales4439-11.36%
October Median Price500,0000-100.00%
YTD Median Price469,000440,000-6.18%
Salisbury
20072008% change
October Sales138-38.46%
YTD Sales4034-15.00%
October Median Price349,000254,950-26.95%
YTD Median Price310,000299,500-3.39%
West Newbury
20072008% change
October Sales51-80.00%
YTD Sales4034-15.00%
October Median Price640,0000-100.00%
YTD Median Price530,200472,500-10.88%
Newbury
20072008% change
October Sales510100.00%
YTD Sales61621.64%
October Median Price500,000327,500-34.50%
YTD Median Price460,000430,000-6.52%
Merrimac
20072008% change
October Sales12100.00%
YTD Sales3022-26.67%
October Median Price00
YTD Median Price3765003775000.27%
