June 21, 2018
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Home sales in Northeast post large gains

In this Wednesday, Oct. 21, 2009 photo shown is a sign for a home for sale in Philadelphia. Home resales rose far more than expected last month to the highest level in more than two years as buyers scrambled to complete their purchases before a tax credit for first-time owners expires.(AP Photo/Matt Rourke)
The Associated Press

NEW YORK — Home resales in the Northeast posted the biggest annual increase of any region in the country last month, reflecting a more stable market than September last year when financial markets were roiled.

The nine-state region registered 81,000 home resales last month, up 11 percent from a year ago, the National Association of Realtors said Friday. The median price, however, fell 7 percent to $234,700.

Nationally, sales of existing homes jumped almost 8 percent from September last year, without adjusting for seasonal factors. The median sales price declined 8.5 percent to $174,900.

Real estate agents and economists attributed the brisk sales to a temporary federal tax credit. First-time homebuyers can receive a credit of 10 percent of the sales price, up to $8,000. The real estate industry is lobbying Congress to extend the credit, which expires at the end of November.

“The economy is not getting a lot better,” said Michael Lynch, an economist with IHS Global Insight. “So absent that extra incentive from the tax credit, we don’t hold out hope that sales can continue to strengthen in that climate.”

The jobless rate in the Northeast held steady at 9 percent from August to September, the Labor Department said this week, the lowest regionally in the nation. But it’s still up from 5.8 percent a year ago because of layoffs in the financial sector.

Six of nine major Northeast cities tracked in the Associated Press-Re/Max Monthly Housing Report showed annual increases in home sales in September, while all but one posted price declines. The report, also released Friday, analyzed sales transactions in the metropolitan statistical areas recorded by all real estate agents, regardless of company affiliation.

Here are some highlights from the region:

— Biggest sales gain: Providence, R.I., saw sales climb by a quarter from a year ago. Prices there continue to fall, tumbling 6.5 percent year-over-year to $201,050. The rate of decline, however, has slowed because there are fewer foreclosures coming on the market.

At the beginning of the year, foreclosures and other financially distressed sales made up half of all sales, said Ron Phipps of Phipps Realty in Warwick, R.I. That fell to a quarter at the end of the third quarter.

Phipps is keeping an eye on the state’s unemployment rate, which rose to a record high 13 percent in September, and could cause more homeowners to fall behind.

— Biggest sales loss: Sales in the New York City suburbs fell the most in the Northeast, dropping almost 5.6 percent in September, while the median price lost 8 percent to $385,750.

Late to enter the housing downturn, the area continues to get battered by job losses. In September, New York state lost 81,700 job from August to September, the most nationwide, according to the Labor Department. The layoffs are expected to continue.

“There hasn’t been an economic recovery in the New York metro history until Wall Street starts to hire,” said Jonathan Miller, president and chief executive of real estate appraisal and consulting firm Miller Samuel Inc. “And that’s not happening yet.”

— Biggest price gain: Pittsburgh has the most stable prices in the Northeast. For September, prices there remained flat from a year ago at $126,000, while sales increased almost 7 percent. Unlike other areas of the country, Pittsburgh’s housing prices never boomed, so the downturn has been more measured.

The federal tax credit and low mortgage rates have been a real boon to the city. October sales look good as more buyers try to get in under the wire. The low median price there makes it an attractive place for first-time homebuyers to buy, said George Hackett, president of Coldwell Banker Real Estate in Pittsburgh.

“Cars cost more than a lot of homes here,” Hackett said. “That (tax) credit probably affects 70 percent of our buyers.”

— Biggest price decline: Augusta, Maine, recorded the worst price drop in the region. The median home price fell almost 9 percent to $135,000, because homes priced under $150,000 made up the majority of sales, said Tanya Busch, an agent with Keller Williams Realty Mid Maine.

Sales there jumped more than 6 percent year-over-year as buyers rushed to take advantage of the federal tax credit and an additional state tax credit of up to $5,000 or 4 percent of the mortgage amount. That state credit for first-time homebuyers expires at the end of November and will be replaced by one for $2,500.

The Maine State Housing Authority said 800 Maine families have used or are using the credit to buy their first home.

Busch expects sales to slow down in October as first-time buyer interest wanes near the credit expirations.

“Buyers don’t want to feel pressured to buy a home,” she said.

— Inventory Highlight: The number of unsold homes fell in every Northeast city in September. Manchester, N.H., and Boston led the declines with a 25 percent and 23 percent drop, respectively. Experts say that a sustainable recovery in home prices won’t happen until the supply of unsold homes decreases more.

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