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Home sales rise 5.6% in Mass. Real estate industry backs an extension of tax credit.

Byline: Martin Luttrell

Single-family home sales in Massachusetts increased for the third consecutive month in September, helping boost third-quarter sales by roughly 6 percent from a year ago and bringing further signs of stability to a sagging market, according to two organizations that track housing sales.

Real estate agents say the federal $8,000 tax credit for first-time homebuyers has helped jump-start the housing market this year; the U.S. Senate began debate on a possible extension beyond its Dec. 1 deadline.

"I'm hoping the tax credit will be extended beyond first-time buyers," said D. Gary Rogers, president of the Massachusetts Association of Realtors, one of two organizations that released third-quarter sales data yesterday. "I have several clients that are growing families and need to move. Some will only move if the tax credit moves" to include them, he said.

The number of single-family homes sold in Massachusetts in the third quarter of 2009 was up 5.6 percent compared to the same time last year, with 11,238 homes sold in 2008 to 11,863 homes sold in the most recent quarter, MAR reported. Median selling prices were down 4.1 percent from $318,000 in 2008 to $305,000 in 2009.

The condominium market saw an increase of 2.3 percent in the number of units sold in the state in the third quarter compared to the same quarter last year, with 4,914 units sold in 2008 and 5,025 units sold in 2009, MAR reported. Median selling prices were down 2.5 percent from $280,000 in 2008 to $273,000 in 2009.

Meanwhile, The Warren Group of Boston said yesterday that single-family homes sales rose 4.5 percent in September to 3,785 from 3,623 in September 2008. Third-quarter home sales totaled 13,215, a 6 percent increase from 12,466 in third-quarter 2008, said the publisher of Banker & Tradesman, which tracks real estate and foreclosure data.

The $8,000 tax credit is part of President Barack Obama's stimulus plan, and the first-time homebuyer incentive modified a $7,500 tax credit established by former President George W. Bush last year, with the main difference being this year's tax credit does not have to be paid back.

Those who purchase their first home between Jan. 1 and Nov. 30 of this year can claim the credit by filing an amendment to their 2008 tax return or by claiming it on their 2009 return. Realtors have said the tax credit helped spur sales, and are in favor of extending the deadline, and even opening it up to other buyers.

The Senate took up the matter yesterday, and the House will follow, said U.S. Rep. James P. McGovern, D-Worcester.

"I supported the initial tax credit, and I've urged that it be extended," he said. "One of challenges we're faced with is how to pay for it. We have a huge deficit, and this is adding to the overall debt."

Mr. McGovern said he is wary of extending the tax credit beyond first-time homebuyers, especially as Congress wrestles with extending unemployment benefits. He said the House must find ways to offset measures that cost money so they are "deficit neutral."

"People would like this, but we have to do it in a fiscally responsible way."

Steven Levine, a Realtor with REMAX First Choice in Shrewsbury, said extending the tax credit to other buyers would help stabilize more than the bottom of the market. He acknowledged that he didn't know how to pay for such an extension. He said the latest quarterly sales numbers indicate the housing market is ready to show slow recovery.

"We've definitely reached the bottom. It's not a situation where the swimmer touches the bottom of the pool and springs back up to the top again," he said.

"Certainly, the $8,000 tax credit has been a big help. But, right now we're helping the lower end, but not passing it along to the purchasers of higher-end properties. A couple making $185,000 a year and working 70 hours a week is not getting a break, and they need it more than the single guy buying a condo."

Timothy M. Warren Jr., chief executive officer of The Warren Group, said the higher sales volume is encouraging. The tax credit has helped give the housing market enough momentum that it will not be disastrous if it is not extended, he said. Prices were down 1.4 percent in September from a year earlier, showing a lower decline than previous months, he said.

"Consumer confidence is up and the stock market is doing well," he said, explaining why the housing market should show consistent improvement. "People again have some sense of security in their retirement accounts."

In Worcester County, single-family home sales were 551 in September, up nearly 18 percent from 467 in September 2008, The Warren Group said. The median price last month in Worcester County was $209,900, down 4.16 percent from $219,000 in the same month last year, The Warren Group reported.

Statewide, the median price for homes sold in September slipped 1.4 percent to $285,000 from $289,000 last year, The Warren Group said, making it the smallest drop in year-over-year monthly median home prices in about two years. The third quarter median home price dipped 3.9 percent to $299,900 from $312,000 in the previous year's third quarter

Condominium sales in Massachusetts, which had plunged by double-digit percentages in 2009, also perked up in September, reported The Warren Group, adding that it marked the first year-over-year increase in condo sales in more than two years.

ART: CHART

PHOTOG: T&G Staff/STACEY ARSENAULT

CUTLINE: Prices of homes, condos
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Title Annotation:MONEY
Publication:Telegram & Gazette (Worcester, MA)
Date:Oct 28, 2009
Words:953
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