The Boston globe has a good article out today about how fallen prices combined with low mortgage rates and the $8,000 tax credit are luring more first-time home buyers into the market. The Globe States:
Nationally, first-time buyers accounted for about 65 percent of transactions of existing homes for the first quarter of the year - a 41 percent increase from the same period last year, according to HouseHunt Inc., a information firm based in Huntington Beach, Calif. The National Association of Realtors also reports more first-time home buyers.
"The market heals from the bottom up," said Walter Molony, a spokesman for the realtors trade group.
In the Boston area last week, 464 sales agreements were signed, a 53 percent increase from the first week in March, according to MLS Property Information Network Inc. The region's real estate market traditionally accelerates in the spring, but many wondered whether that would be the case this year, given the slowing economy and housing collapse. While MLS does not track how many of the agreements involved people buying their first homes, national data show newcomers probably generated much of the activity.
I agree with this. My activity over the past few weeks has tripled. I have definitely seen an increase with showing requests as well as hits on website. The Globe also states:
And bargain-seekers are finding more properties to choose from this spring. Over the last six months, the median price for a single-family home in Massachusetts has been below $300,000. Before that, the median price had not dropped below $300,000 since early 2003, according to Warren Group, a Boston company that tracks real estate transactions. The median condominium price fell 14 percent in February to $220,000, from $255,750 in February 2008 - the lowest it's been since February 2003.
Mortgage rates also have plunged to historic lows. Nationwide, a 30-year, fixed-rate mortgage averaged 4.78 percent for the week ending April 2, according to Freddie Mac, the lowest rate recorded since the agency began its mortgage survey in 1971. A 15-year, fixed-rate mortgage averaged 4.52 percent, also an all-time low.
People thought it was a great time to buy 5 or 6 years ago because interest rates were so low, but now rates are even lower and home prices are 20% lower or more in some areas. How can now not be a great time to buy??
Read the full story
(Source: Jenifer B. McKim, Globe Newspaper Company, April 9,2009)