Massachusetts Home Buyer Guide

Eighteen months ago Massachusetts home buyers did not need be too concerned with whether a home for sale they visited would be available to make an offer on the next day or even the next week. How times have changed. 

A new home listing in Holliston, MA that a Buyers Brokers Only, LLC client wanted to see yesterday went under agreement in about three hours on Thursday. Not three days, but it went under agreement in about three hours. Stories like the one above have frustrated home buyers in Massachusetts over the past few months.

NECN's This Week in Business segment on April 7, 2013 took a look at the Spring real estate market in the Greater Boston Area. This 10:42-minute video is a discussion of the real estate market with Tim Warren of The Warren Group, publisher of Banker & Tradesman, and Kimberly Allard-Moccia, President of the Massachusetts Association of Realtors.  

The lack of real estate inventory had Massachusetts home buyers paying more for homes in March 2013 compared to March 2012.

The median price for single-family homes sold in March rose more than 8 percent to $285,000 from $263,000 a year earlier, The Warren Group, publisher of Banker & Tradesman, reported April 24, 2013. March marked the sixth consecutive month that monthly home prices have increased year-over-year. The first quarter median selling price was $282,500, a 10.6 percent increase from $255,500 in the first quarter of 2012.

After sliding in February due to several snow storms and a lack of inventory, Massachusetts pending home sales increased in March compared to March 2012, the Boston Business Journal reported it April 9, 2013. 

The Massachusetts Association of Realtors provided the pending home sales data. 

After several years of declining prices, Massachusetts home buyers must navigate a real estate market with low inventory and increasing values in 2013. 

The median price for a single-family home in Massachusetts rose more than 12 percent last month to $275,000 from $245,500 in February 2012, The Warren Group, publisher of Banker & Tradesman, reported March 26, 2013. The year-to-date median home price is also up about 12 percent, rising to $279,000 from $250,750 last year.

Although pending home sales in Massachusetts were positive for the 22nd straight month compared to the previous year, the strong pending single-family home sales numbers seen in previous months were absent in February 2013, the Massachusetts Association of Realtors reported March 12, 2013. 

Real estate professionals blame two stormy weekends in February and a lack of inventory for the slow growth in pending home sales, which are a leading indicator of actual home sales in Massachusetts for the following 30 to 60 days. Massachusetts home buyers, especially first-time home buyers, are well aware of the current lack of inventory. 

Massachusetts home buyers calculating the total cost of homeownership may need to remove the potential for tax breaks to repair or replace a septic system and/or for removal of lead paint. 

As part of a package of tax increases and the elimination of a variety of tax breaks, Massachusetts Governor, Deval Patrick, hopes to raise $1.9 billion annually in revenue. Two of his proposals are to eliminate the lead paint tax credit and the septic system repair / replacement credit. 

March has arrived, and we'll move the clocks forward an hour next week. It sounds like warmer temperatures and longer days are around the corner, but Massachusetts home buyers are wondering whether the spring real estate market will ever arrive.

The number of Massachusetts homes for sale has continued to decline over the past year. As of January 31, 2013, the inventory of single-family homes in the Bay State decreased 27.3 percent compared to January 2012, the Massachusetts Association of Realtors reported February 26, 2013.

Despite the lack of inventory, Massachusetts home buyers continue their quest for homes. 

Both single-family home sales and median price increased in January compared to January 2012, the Massachusetts Association of Realtors reported February 26, 2013.

Massachusetts real estate prices have increased four straight months, and single-family home sales have shown positive results in 19 straight months.

For those Massachusetts home buyers that have benefited or will benefit from purchasing a home at prices at or near the bottom of the real estate market, they may have to share their good fortune with the Commonwealth of Massachusetts, if a proposal by Governor Deval Patrick is enacted by the legislature.    

As part of a package of tax increases and the elimination of a variety of tax breaks, Governor Patrick hopes to raise $1.9 billion annually in revenue. One proposal is to eliminate the capital gains tax exemption on home sales.

Presently, Massachusetts follows federal tax law in exempting up to $500,000 in capital gains on the sale of homeowners primary residence. Governor Patrick's proposal to the eliminate capital gains exemption is in conjunction with raising the income tax from 5.25 percent to 6.25 percent, effectively raising the capital gains rate to 6.25 percent.  

For example, if a homeowner sells a home after livng in it for a number of years for a gain of $200,000, that homeowner will have $12,500 in tax liability. 

In real estate, there are dozens of industry terms that can be confusing or overwhelming.  Condex, LTV, ARM, Assessed vs. Appraise valued, FSBO, REO, Short Sale, BOM, etc.  It’s endless.

There are even many different ways to refer to real estate agents: agent, broker, realtor.  Are these terms all the same thing; can they be used interchangeably?  Here is some clarification on what each title means and what exactly is a Massachusetts Realtor.