According to a report published in the Boston Globe Monday, people who move to the suburbs to find affordable housing “often sacrifice the savings to higher transportation costs.”  This report strikes me as overly simplistic…taking just two of the many variables homebuyers take into consideration when purchasing a home.  Sure, you can find examples of “affordable” housing in Boston and Cambridge…but would these homes have the same square footage, yard area and other amenties homebuyers consider when purchasing a home?  My experience tells me no.  Of course most homebuyers would prefer a shorter commute to work, however, other factors such as the quality of a school system and recreation facilities and are just a few of the many other factors home buyers take into consideration when purchasing a home.  Often times families must balance the commutes of two spouses, proximity to family or quality day care—the list goes on and on! Yes, transportation costs must be factored into everyone’s household budget…just remember to look at the big picture, not merely two pieces of a complicated puzzle.

Media Reports and the Housing Market

According to a survey by the Pew Research Center, just 29% of Americans perceive that news organizations generally get the facts straight.  Negative news in the real estate industry tends to have a big impact on ratings for the media and the message is often skewed in order to attract readership.  One such example is this headline which ran in the December 2, 2009 issue of the Chicago Tribune — “Mortgage rates hit lows, but will it last?”  The article offered no evidence that rates would soon rise—3 months later rates are still low—the intimidating headline was never justified.  For a closer look at how you can come to a more balanced view of the news and the real estate market consider this Real estate and the media report. Remember too that real estate trends and sales are local.  Sales vary dramatically from town to town, neighborhood to neighborhood and price point to price point. Consider the market data for single family home sales in Andover and North Andover.  Median sale prices are up 13% in Andover and 37.5% in North Andover for the first quarter of 2010 when compared to the first quarter of 2009–two very different trends in two very similar towns!  Your trusted real estate professional can help you understand the housing market in your neighborhood.

Every news report I read reports improving real estate sales in Massachusetts. According to  the Boston Globe sales of single family homes in Massachusetts rose 3% in 2009, the first year over year increase since 2004.  Whether or not this trend continues is the subject of much debate.  There is much speculation and many opinions as to whether or not the housing market will continue to recover after the government home buyer tax incentives expire.  Let’s take a look at single family home sales in Andover and North Andover. 

 In Andover the average single family home price in 2009 was $574,387 down .9% from the 2008 average sale price of $585,193.   A total of 252 single family homes sold in Andover in  2009 up 1.6%  over 2008 sales.

In North Andover the average single family home price in 2009 was $459,480 down 14.2% from the 2008 average sale price of $528,274. A total of 195 single family homes sold in North Andover in 2009 up 7.8% over 2008 sales.

You see the market data can be very different even in two neighboring towns.  Knowing and understanding your local market is critical when making buying or selling decisions.   See what homes have sold in YOUR NEIGHBORHOOD. 

With the New Year upon us we’re reading and viewing the recommendations and predictions from many experts in all fields—personal, family, health and, not the least of course, ecomonics and real estate.  Naturally, I listen carefully to the comments offered by the economists.  While most agree that the housing market appears to be stabilizing, many of the experts also agree that the recovery will be long and slow and no one is certain if the recovery will be able to sustain itself once the government homebuyer tax credits go away.  While I believe this market is the perfect time for many people to buy their first home and for others to “move up” to a larger home,  I also agree with the economist I heard on “Good Morning America” this weekend.  His advice?  Before you think about investing in anything…stocks, bonds, real estate—even your 401K account…pay off all your credit cards.  By making sure your accounts are up to date and saving for a down payment you’ll be able to afford that home—no matter what the market condition.

North Andover Tax Increase

The average homeowner in North Andover will see his or her real estate tax go up again in 2010.  An average home valued at $447,800 will soon pay  property tax of $6502.  Selectman voted earlier this month to set the North Andover residential property tax rate at $12.74 per $1000 valuation. See the current valuation of your home in North Andover. 

Andover residents will see similar increases in their property taxes where the residential tax rate will increase to $13.19 per $1000 valuation.  If you’re concerned about your ability to pay your 2010 property taxes contact me at REMAX Partners in Andover.  Many cities and towns offer tax exceptions or abatements for qualified residents but there are very specific procedures and deadlines which must be followed.

First time homebuyers responding to the federal tax credit continue to drive sales of existing homes nationally and in the northeast.  Figures released by the National Association of Realtors showed November 2009 sales of existing homes up 53%.  The median price in the northeast was $223,400, down 13.1% from the same period last year. Inventory fells to a 6.5 month supply of homes.

 Lawrence Yun, NAR chief economist, said the rise was expected. “This clearly is a rush of first-time buyers not wanting to miss out on the tax credit, but there are many more potential buyers who can enter the market in the months ahead,” he said. “We expect a temporary sales drop while buying activity ramps up for another surge in the spring when buyers take advantage of the expanded tax credit, which hopefully will take us into a self-sustaining market in the second half of 2010. In all, 4.4 million households are expected to claim the tax credit before it expires and balance should be restored to the housing sector with inventories continuing to decline.”

According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage fell to 4.88 percent in November from 4.95 percent in October; the rate was 6.09 percent in November 2008. Last month’s mortgage interest rate was the second lowest on record after bottoming at 4.81 percent in April 2009.

If you agree that lower prices, low interest rates, tax credits and a stabilizing supply of homes make this a good time to buy your new home in the Andover area start your home search here.

Contract activity for home sales has increased for the past six months…”a pattern not seen in the history of the index since 2001″ according to the National Association of Realtors.  Lawrence Yun, chief economist for the National Association of Realtors said the “momentum in the housing market has clearly turned for the better.”

We’re seeing similar trends in both Andover and North Andover this spring, with more single family homes sold in each of these towns in 4 of the past 6 months when compared to the same 6 months in 2008. Find out what homes are selling in your neighborhood this week and contact me at ReMax Partners to find out what this economic news means for home buying and selling in the Andover area.