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Local realtors believe the time to
buy is now
~ An in depth look at the state of
the housing market in Canton ~
By Jeffrey
Pickette
Citizen Staff
Like the rest
of the economy, the housing market has been stuck in a prolonged
slump, but local realtors are cautiously optimistic that the
real estate industry has already bottomed out and those
interviewed believe that the market is finally showing signs of
stabilizing.
The winter
season is typically a slow one for the real estate industry, but
even so, the market is in better shape than it was at this time
last year, according to Cheryl Tobias, co-owner of Century 21
Access Properties in Canton.
“I think we’ve
pretty much seen the worst,” added Lorraine Mitchell, manager of
the Canton branch of Jack Conway. “I think from now on [the
market] will start to go back up again, probably on a gradual
basis.”
A combination
of low home prices, low mortgage and interest rates and a tax
incentive for home buyers has created this “buyers’ market.”
Rick Tobias,
the other co-owner of Century 21 Access Properties in Canton,
said he could not “remember a time that’s as good to buy a home
as today.”
Eagle’s Nest
Properties owner Gilda McGonagle echoed this sentiment, calling
the market at its present state “a perfect storm.”
“I don’t think
any of us can predict [far into] the future, but the first half
of the year looks good,” McGonagle said. “All the stars are
lined up for a great climate right now.”
And if the
housing market is beginning to turn the corner, perhaps other
parts of the economy will follow suit and stabilize.
“The housing
market drives everybody,” Janet Pratt, owner of Pratt Realtors,
said. “People when they buy a house are going to buy furniture
and they’re going to buy new carpeting. They’re going to put
hardwood in —they’re going to be doing a lot of different
things.”
Norfolk County
Register of Deeds William P. O’Donnell in the Annual Real Estate
Activity Report for Norfolk County noted that the county
recorded 13,967 deeds in 2009, a one percent increase from 2008,
providing additional evidence that “the slowest point in the
market has been reached.”
But the slight
increase in activity on the market did not coincide with a rise
in the sale price of properties. The average sale price of deeds
over $1,000 in Norfolk County was $505,992, falling six percent
from 2008 to 2009, according to the Registry’s report.
Meanwhile, the average sale price in Canton, $486,903, was even
below the county average.
Rick Tobias
pointed out that typically “the volume of sales increases first,
and then the value of homes tends to go up from that point
forward.”
Added
Mitchell: “The prices were lower, not so much because the value
went down, as it was because the properties that were selling
[tended to be] first-time buyer homes.”
Mitchell said
homes attractive for first-time buyers (typically lower priced
homes) seemed to be “the busiest part of the market” in Canton.
Part of the reason for this is the tax incentive for first-time
buyers.
According to
the Massachusetts Association of Realtors’ website, a first-time
buyer can receive an $8,000 tax-credit. There are financial
stipulations, however. A single buyer cannot exceed an income of
$125,000, while a married couple cannot exceed $225,000.
Additionally, the purchased home cannot be worth more than
$800,000.
Current
homeowners selling their homes and buying a new one can receive
a $6,500 tax credit, as long as they lived in their previous
home for five consecutive years during the last eight-year
period.
“[These
incentives] really have played a great role in getting the
market moving,” Rick Tobias said.
“It fired up
the lower-end market, all the first-time home buyers,” Cheryl
Tobias added, noting that these homes generally sell for
$300,000-$350,000. “I’ve seen a slower movement on the higher
end homes.”
Overall, there
were 75 single-family homes on the market in Canton as of last
week, according to Pratt. The average selling price of these
homes is $612,699, and the average time these homes have been on
the market has been 143 days. There were also 32 condos on the
market as of last week, with an average selling price of
$266,000. These condos, on average, have been listed for 200
days.
“There’s no
way the average home in Canton is [$612,699],” McGonagle said.
“My point is we’re a little lopsided at the high end. Those are
still on the market, whereas the [homes] at the bottom are
flying off.”
In other
words, the outliers (the million-dollar homes) are driving up
the average listing price of a home in Canton. While these
high-end homes are not being sold at the same rate as
lower-priced homes, those interviewed stressed that any house
could be sold as long as it was priced within reason.
The number of
foreclosures fell 26 percent in Norfolk County from 2008 to
2009, according to the Registry’s report. In Canton, there were
11 foreclosure sales in 2009 as opposed to 12 in 2008. Local
realtors agreed that while foreclosures have been more prevalent
in nearby towns like Brockton or Randolph, that has not really
been the case here in Canton.
In fact,
according to the Registry’s report, 1,473 new mortgages were
recorded in Canton in 2009, an increase of 40 percent from the
previous year.
“These numbers
show us that a healthy number of Canton properties have retained
sufficient equity during these last few difficult years to
provide owners with the opportunity to borrow at [2009’s]
favorable interest rates,” Register O’Donnell wrote in the
Registry’s report.
Just how long
the real estate market remains stable and just how long it takes
to return to pre-recession levels remains to be seen and depends
on a number of ever-changing variables.
For one, the
tax credit for home-buyers is set to expire April 30 of this
year (a binding contract to purchase has to be in effect by this
date in order to qualify). The tax credit, which began on
January 1, 2009, was originally going to expire in November of
2009 before it was extended. It remains to be seen whether it
will be extended again. And if it is not extended, it remains to
be seen how it will impact the real estate industry.
While the tax
credit may have provided a boost to the housing market,
McGonagle saw it as more of a “quick fix” than as a permanent
solution in terms of jump-starting the economy as a whole. She
would have rather seen the tax credits be given to small
businesses.
“Use the money
more productively to fix the problem at its root, rather than
throwing the money into a homebuyer tax credit that is not
sustainable and doesn’t fix the underlying problem, which I
think is the economy and unemployment and the state of small
businesses everywhere,” she said.
Another
variable to take into consideration is interest rates, which are
low now, but can always fluctuate.
“If interest
rates go higher it will take people out of the market
completely,” Pratt said.
But at the
present, the tax credit is still in effect and interest rates
remain low, so the resounding message from local realtors is to
buy. Cheryl and Rick Tobias believe that it is the “tail-end” of
the buyers’ market, but just because it is a buyers’ market
doesn’t necessarily mean that sellers come out on the short
end.
“It’s all
relative,” Cheryl Tobias said. “You’re not going to make as much
as you would have made five or six years ago, but you’re not
going to pay as much as you would have five or six years ago on
your next purchase.”
January 28, 2010
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