Tax Credit Extension will Boost Sales in First Half of 2010, Leading into a Strong Spring Market; Second Half of the Year Could Face Big Challenges First Quarter to Remain Steady; Unemployment, Lending, and Foreclosures to Remain Critical Factors for Remainder of the Year ,
Boston, MA -- (SBWIRE) -- 01/22/2010 -- The federal tax credit injected a much-needed jolt to the housing market in 2009, offsetting what would have otherwise been a rocky and uncertain year. Single-family home sales activity across New England showed a year-over-year increase in 2009, according to RE/MAX of New England, due primarily to government tax incentives, as well as historically low interest rates and decreasing prices.
Rhode Island, which has the second highest unemployment rate in the nation, had the highest percentage rise in single family homes at 14.4%; Maine came in second at 7.9%; Massachusetts saw an increase of 5.0%; Connecticut had a modest increase of 0.7% while Vermont remained flat at .03%.
Condominium sales showed consistent decreases across New England with Maine showing the biggest decline at -16.1% and Vermont showing least at -.9%. This can be attributed to low single-family home prices, which provided perfect entry level opportunities for first time home buyers.
Multi-family units showed a strong rebound in the majority of New England states suggesting increased investor activity. Rhode Island had the highest increase in transactions at 35.6%; Connecticut posted a 25.9% increase over 2008; Maine showed a 19.0% increase; New Hampshire had a 8.5% increase; and Vermont, which also showed the smallest increase in single-family home sales, had a decrease of -16.6% for the year.
Taking a closer look at the fourth quarter of 2009, many New England states showed the effects of first time homebuyers trying to capitalize on the tax credit before its original deadline passed at the end of October, with large transaction gains in that month tempered by a slower November. According to the November AP-RE/MAX National Housing Report, while only a few of New England’s major hubs showed increases from October 2009 to November 2009, all showed double digit increases year-over-year in November 2009.
Transactions in Boston, MA were up 5.2% from the previous month and up 61.4% over November 2008; Providence, RI reports transactions up 4.9% versus the previous month and 62.5% over November 2008; Hartford, CT was flat from October to November; but up 67.7% over November 2008; Manchester, NH was down -2.9% over the previous month, but up 67.2% over November 2008, Augusta, ME was down -19.4% from October to November, but up 56.3% over November 2008.
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