Could first-time homebuyers spark real estate recovery in Boston?
Property values continue to improve in the Greater Boston area in 2012. According to the latest Case-Shiller report, Hub-area home prices rose about 1 percent in July 2012, which comes as a breath of fresh air for many housing experts.
However, Boston Globe contributor Scott Van Voorhis notes that the far more interesting aspect of the Case-Shiller report is the specific market segments where prices are heating up - the mid and lower ends of the market. According to the report, prices are rising faster for homes for sale in Boston listed below $401,000 than for those at the high end of the spectrum. In some instances, this could be the result of investors swooping in and picking up for-sale properties in order to renovate the spaces and flip them for profits. Nevertheless, this trend also shows that more Americans feel confident in the housing market, and first-time buyers may play a big part in the eventual real estate market recovery.
The mid-tier of the market - between $257,301 to $401,782 - rose 7 points since March to 154.84, according to the Case-Shiller report, which is based off of a 100 point system. The low end of the market, properties listed below $257,301, rose nearly 6 points to 160.46 during the same time period. The high-end market saw minimal gain and topped at 149.46 points.
This recent report comes just days after The Warren Group stated that sales of single-family homes in the Bay State reached 5,118 in August 2012 - a 20 percent year-over-year increase. Buyers may look to mid-tier markets in emerging neighborhoods to find affordable homes with raw potential. In some cases, first-time homeowners may feel more comfortable investing in houses they can fix up over time and don't require significant down payments.
"As long as the interest rates stay so low - and there is no indication they are going to rise - I think buyers will still be out there buying," local real estate expert Lisa Feldman told the MetroWest Daily News. Feldman went on to say the nearly stable prices make prospective buyers feel confident they are getting the best deal with some sense of security.
First-time homebuyers are the key to a thriving housing market, and in Boston, that demographic might begin entering the market more regularly in the near future.