Good afternoon loyal BostonCondoLoft readers, prospective homebuyers, and passersby. First, I would like to announce that this is our one-thousandth-and-first post, and this is very exciting for all of us here at Condo Domain. Second, I am happy to be speaking to you today as a bearer of good news, for the housing market is still on the upswing, Spring is slowly turning to Summer here in lovely Massachusetts, and The Bruins and The Celtics are both entering new series in their hunt for the championship. (It is currently 3-2 with The Bruins in the lead at intermission in the first of a five-game series against The Fliers. The Celtics have their first game against LeBron and the Cavaliers at 8:00pm tonight, also the first in a five-game series.)
The Home-Buyer Tax Credit officially expired yesterday (depressing, I know,) however its effects on the housing market have been tremendous as home sales continued to soar through March according to data released earlier this week by the Warren Group, a Boston-based company that tracks local real estate. Remember how I said that the suburbs were still lagging behind in the race for stabilization in the housing market? Well, statewide, sales of single-family homes were up 27.6 percent and condominiums by 33. 4 percent in March, compared with the same month in 2009.
Another good sign for the market came in the way of a price increase, “Single-family homes increased 7.8 percent, compared with the same month a year ago, to a new median price of $275,000, according to Warren Group,” reports Jenifer B. McKim of The Boston Globe, “Condominium prices climbed 8.6 percent to a median of $249,000.” The steady price increases have also pushed homeowners to finally put their homes back on the market, giving prospective buyers more choice, which should lead to an increase in sales. When homes aren’t coming onto the market, buyers are left with less choice and the market begins to tank, so although a “price increase” sounds bad, trust me, it’s good.
Many experts attribute all this positive market change to the Home-Buyer Tax Credit, which ended yesterday, so what will happen now that the incentive is gone? Let me demonstrate what I think will happen with a metaphor. Imagine that the housing market is a little girl, Lucy, on a swing. Before the recession, Mommy was there pushing, and Lucy was soaring. After the recession, however, Mommy was too tired to push Lucy, and Lucy was too little to swing herself as high as she wanted to go. Then, a nice man sees Lucy and her mom, and since he is understanding of Lucy’s mothers situation, he asks her if she wants a push. The nice man pushes Lucy for a while until the recession lets up and Lucy’s Mom finally gets the energy to push her daughter on the swing again. Now, the man is out of the picture, but Lucy is still going high, because Mommy is there pushing. Although she may still be building her strength, Mommy has the momentum from the nice man’s push to make sure Lucy is swinging as high as she wants to go.
Basically, although the tax credit was a pure incentive, I think the incentive fueled the market with enough momentum to keep it strong even after the credit dissappears.
Thoughts? Leave a comment below!