January 29, 2010 Mara Bushari

According to Warren Group, a Boston company that tracks local real estate data, sales of single-family homes in Massachusetts rose 3 percent in 2009 – the first year-over-year increase since 2004. Prices also showed signs of stabilization, with the median home price at $295,00 in December 2009, up 10.4 percent from December 2008.

What savvy Massachusetts and Boston real estate buyers should consider is whether this stabilization is entirely or at least heavily due to government incentives, or if this is truly a sign that the economy is ready to stand on its own.

Personally, I am somewhat on the fence. The homebuyer tax credit of 2009 had a huge impact on home sales in the third and fourth quarters. Historically low interest rates influenced by the Federal Reserve and increased FHA loans have also propped-up the Massachusetts and Boston real estate markets. The federal tax credit, which was expanded and extended last year, is scheduled to expire this spring, and the Federal Reserve plans to stop buying mortgage-backed securities by the end of the first quarter. The major question in my mind is: Is the real estate market strong enough to be sustainable without government capital?

It looks like we will know the answer to that question in the third quarter. It will depend on job security and the ability of reasonable financing options. Don’t forget, if rates increase by even 1 percent, a buyer’s capability to purchase may drop by $10,000 or more.

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Mara Bushari

Mara is a creative thinker and strategic marketer. She graduated Summa Cum Laude from Boston University’s College of Communication and worked in international finance before joining The Bushari Team. Mara strives to exceed expectations. As Client Relations Specialist, she is a key facilitator in all team transactions, making the buying or selling process as stress-free as possible for the client. Mara learned many of her extraordinary organizational and problem-solving skills during her service in the Israeli Defense Forces, where she earned the “President’s Award” for exceptional service. In the military, Mara solidified her abilities to achieve top results in high pressure and time sensitive situations. In her spare time, Mara enjoys skiing, photography and writing.

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