SALES UP, PRICES DOWN
IN ESSEX COUNTY MASSACHUSETTS

December 2008 total home sales in Essex County increased by 4.9% over December 2007, led by the sale of multi-family homes which went up by 172%! The sale of bank owned properties drove down the price of multi unit buildings by 33% to an average of $184,800 driving investors and savvy, bargain-hunting home buyers to the closing table. The glut of foreclosed homes has pushed down prices, and distress sales now make up well over half the market in some towns such as Lynn and Lawrence. Other towns, including Newburyport, Marblehead, Danvers & Hamilton, have had relatively few foreclosures and therefore homes prices haven't dropped as sharply.

Single family sales were relatively flat over the same period, despite a 17% drop in prices over 2007. But that is actually good news for sellers of single family homes, which for the most part in 2008 experienced declining sales numbers. But toward the end of the year sales have been coming back. Could the lure of a $7500 first time homebuyer tax credit be tied to this rise?

The home buyers that we have talked to have not indicated that the tax credit was the driving force that made them step up to the home buying plate. What was the driving force was the lure of getting a bargain-priced home at the bottom, or near bottom, of the real esate market. The second motivating factor was the availability of mortgage money at rates below 6.0%.

Jim Armstrong
http://www.armstrongfield.com
978-394-6736

BUYER POWER!

For the 11^th consecutive week Freddie Mac's Primary Mortgage Market Survey showed that the average interest rate for the 30-year fixed-rate mortgage (FRM) broke another record in the 37-year history of the survey. During the week ended January 15 the rate averaged 4.96 percent with 0.7 point, down from last week's average of 5.01 percent with 0.6 point.

This is the 11th week in a row that mortgage interest rates have dropped, due in part to a slowing economy, and also to the actions that the Federal Government has been taking. Some (healthy) local banks have been receiving funds from the Feds specifically for the purpose of supplying money for mortgages to local consumers.

We have had clients close on homes with mortgage rates even lower - 4.5%! This equates to a mortgage payment of only $1721.00 per month on a $350,000 home with just 3% down.

You could buy a $200,000 condo (or even single family) with 3% down ($6,000) and have a mortgage payment less than $1000! It's got to be cheaper than what you are currently paying for rent. Plus, unlike rent, your mortgage payment is mostly tax deductible, giving you a larger tax refund. Add on the $7500 first time homebuyer tax credit, and you would have to be crazy not to buy a home right now!

I know what you are thinking - "But you are a Realtor. Of course you want me to buy a home now. That's how you make your money and you have lots of Christmas bills to pay off!"

True, selling real estate is how a earn a living. But I earn clients for life by giving them what I believe to be good, accurate information that is going to help them in their decisions when buying or selling a home. I just recently purchased a home myself because of these ideal buying conditions. Though I had owned property before, most recently I had been renting - and waiting for the right time to buy.

This IS the right time.

Jim Armstrong