Merrimack Valley

Prices down, homes sales up in Massachusetts

By Bill Kirk
bkirk@eagletribune.com
Published: December 1, 2008

While the nation continues to reel from a fall-off in home prices and sales, local real estate agents are reporting a surge in buyer interest.

During the summer and into September, an increasing number of people got into the real estate market, whether they were investors looking to pick up a cheap multifamily, or first-time homebuyers snagging a low-priced single-family home.

That interest was reflected in September and October home sale statistics, which saw an increase in both months.

"More people were looking, because asking prices of homes are reflecting what the market could bear," said Paul Consoli, of Ben A. Consoli Realtors in Haverhill. "Prices are coming down from unrealistic highs."

The Massachusetts Association of Realtors reported sales were up 6.6 percent compared to October 2007 while the Warren Group, which tracks a larger set of monthly sales, including foreclosure and sale-by-owner transactions, said sales were up 14 percent for the month.

It was the second straight month of increased home sales, and is a marked departure from national figures, which showed sales of existing homes slipping 1.2 percent in October, which was 9.8 percent lower than a year ago.

In Massachusetts, however, "an increase in sales in each of the past two months is definitely something to feel good about, but we still need to see how sales are in November to determine if this is a trend," association president Susan M. Renfrew said.

Warren Group CEO Timothy Warren called the back-to-back monthly sales increases a "hopeful sign" but added, "The light at the end of the tunnel is still a long way off."

Consoli, whose company sells homes in Massachusetts and New Hampshire, said interest was high, and home sale figures were increasing, right up until the financial meltdown began to get a lot of publicity in mid-September with the bankruptcy of investment bank Lehman Brothers.

At that point, sales all but dried up, he said, meaning that November sales figures could show a decrease.

"For September and October sales, that purchase decision was made 30 to 60 days before the closing," he said. "What that was indicative of is that we had an increase in activity in August and September. Once Lehman Brothers went bankrupt, and then the trouble with the economy came to light, people got scared.

"On the good side, it told us that people are anxious to get out and purchase homes," he added.

Median home and condo prices in Massachusetts during October were down between 11 and 14 percent from a year ago. The median home sale price in October was nearly $295,000, down 11 percent, according to the Realtors' association. The Warren Group put the price at $285,000, down nearly 14 percent over the year.¬

Consoli and others noted that perhaps the biggest increase in sales has been in the multi-family market, where investors are seeing really good buys.

"People who see an opportunity in owning a multifamily are saying, with their dollars, 'We think we are reaching the bottom,'" Consoli said.

Making matters even better for buyers is that mortgage interest rates are low, hovering around 6 percent and even dipping into the high 5s at one point last week, Consoli said.

The only caveat is that lending has tightened up somewhat.

"Underwriting is different," he said. "Buyers need a good credit score, assets, and a job."

 

Third-Quarter
Single-Family Sales
Third-Quarter
Multifamily Sales
Community
2007
2008
Percent change
  
2007
2008
Percent Change
Lawrence
36
59
63.9
  
31
140
351.6
Methuen
89
70
-21.3
  
10
17
70
Haverhill
92
103
12
  
19
28
47.4
Andover
103
71
-31.1
  
0
1
N/A
N. Andover
51
62
21.6
  
5
1
-80

 

Third-Quarter Single-Family
Median Prices
Third-Quarter Multifamily
Median Prices
Community
2007
2008
Percent change
  
2007
2008
Percent Change
Lawrence
$219,950
$155,000
-29.5
  
$269,000
$150,000
-44.2
Methuen
$280,000
$283,700
1.3
  
$297,500
$255,000
-24.4
Haverhill
$283,750
$270,000
-4.8
  
$298,000
$178,950
-39.9
Andover
$566,000
$540,000
-4.6
  
0
$329,000
N/A
N.Andover
$499,900
$521,000
4.3
  
$407,000
$355,000
-12.8