Natick Group Sees Housing Market Shifting
While the foreclosure crisis and recession of 2008 created a buyer's market for homes and condos, Natick-based Re/Max of New England thinks things could start changing in 2013.
The real estate group, which has 20 offices in MetroWest and more than 220 in New England, said in its 2013 Housing Forecast released this week that improving economic conditions will help balance out the housing market this year.
Changing Conditions
Five years ago, a sub-prime foreclosure crisis followed by a recession that led to higher unemployment and more foreclosures dealt a major blow to the housing market.
Home values plummeted and available inventory ballooned. Though the market is unlikely return quickly to the health it had in the mid-2000s, Re/Max executives see several factors helping the market heal this year.
They include historically low interest rates, increased consumer confidence and falling unemployment, which together have helped shrink the inventory glut in New England.
"Unemployment is at a four year-low in Massachusetts, which allows more people to actively become involved in the real estate market because they aren't as concerned about job security," said Ben Saunders, a Framingham-based Re/Max associate quoted in the report.
In 2012, sales of single family homes in Massachusetts ticked up 21.6 percent over 2011 – the largest year over year increase since before the recession.
"As the amount of available inventory continues to shrink, watch for a gradual appreciation in median home prices in the second half of 2013 as the market begins to shift from a buyer's market to a balanced market," said Dan Breault, executive vice president and regional director of Re/Max New England.
Key Provisions Preserved
Re/Max New England said real estate agents breathed a sigh of relief early this month when it became clear that Congress would not discontinue the mortgage interest deduction and mortgage debt provision.
The former allows homeowners to take a tax write-off on some of the interest they pay on their home loan, while the latter provides an exemption to the taxation of modifications, short sales and foreclosures.
"The loss of either provision would have resulted in a major blow to the recovery of the real estate market," the report reads.
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