Bold is mine..(btw...I heard a report on CNN this morning that currently immigrants are driving the first time home market and that the homes are generally larger and more expensive due to the extended families occupying them)
boston.com
Home sales spring
Low mortgage rates, warm weather encourage buyers to snap up houses in state, nation at much higher rate
By Stephanie Stoughton, Globe Staff, 2/26/2002
ome sales surged to springtime levels last month as buyers lured by low mortgage rates and unusually warm weather snapped up properties, two industry groups reported yesterday.
Sales of previously owned homes nationwide rose 14.6 percent to a seasonally adjusted annual rate of 6.04 million units in January, up from a pace of 5.27 million units in the same month in 2001, according to the National Association of Realtors.
In Massachusetts, the residential real estate market also took off in January, typically a slower month for home shopping. Year-over-year sales of detached, single-family homes climbed 18 percent to 3,092 units, while condominium sales were up a stunning 23 percent to 966 units, according to the Massachusetts Association of Realtors.
''We are now in the throes of an early spring season,'' said David Drinkwater, president of the state association.
With 30-year fixed mortgage rates hovering around 7 percent, homes have become increasingly affordable. In addition, many home shoppers who were rattled by corporate layoffs, the terror attacks, and the recession appear to have reentered the market, much to the relief of the nation's real estate agents.
''Every morning, I'm waiting for the other shoe to drop,'' said Jack Conway of Jack Conway & Co., a Norwell real estate firm with 40 offices in Eastern Massachusetts. ''It's not dropping.''
Residential real estate firms saw their business plummet after Sept. 11. But November and December sales showed marked improvement for many companies, including Jack Conway & Co. And last month, Conway said his sales soared by 18 percent.
From December to January, US home resales rose a record 16.2 percent from a pace of 5.2 million units. But in Massachusetts, sales of single-family houses were down 9.7 percent during that period, while condo sales climbed 12.2 percent.
However, the state realtors association cautioned that seasonal factors made the month-to-month comparison less meaningful.
In Massachusetts, the average price for a single-family house rose 3.9 percent to $311,840 in January, compared to the same month in 2001, according to the state association. Condo prices climbed 12.4 percent to $215,696 during the same period.
Average prices for Massachusetts single-family homes and condos - largely existing dwellings - were on the upswing from December to January. But the sales price nationwide for an existing single-family home fell slightly to $191,500 last month, down from $192,500 in December.
Drinkwater said the state's limited housing inventory keeps prices at high levels.
And if the increases continue, he said, ''Some companies may end up relocating, because they cannot afford to pay people enough to stay here.''
Last year's layoffs and economic downturn in Massachusetts have had minimal impact on prices. But big-ticket homes have been staying on the market for longer periods of time, which is actually more normal compared to the unusually fast transactions during the high-tech boom. And the good news for today's buyers is that sellers appear to be more realistic about what the market will bear.
''Sellers have a better understanding than they had 12 months ago, in terms of their expectations of the marketplace,'' Drinkwater said.
Some economists applauded yesterday's reports. But others were wary about reading too much into the data, because recent home sales have been defying expectations and bucking economic trends.
''The fact that home sales did not dip like they did in past recessions has economists looking at this recession differently,'' said Jon Southard, chief economist with Boston-based Torto Wheaton Research, the forecasting arm of real estate firm CB Richard Ellis.
Anecdotally, real estate brokers report that many buyers are shifting funds they had invested in stocks to housing.
If so, this raises questions over whether the robust residential real estate market could be holding back the stock market's recovery, Southard said.
Stephanie Stoughton can be reached by e-mail at stoughton
@globe.com. |
