A whiff of revival in Northeast U.S. home market

Tue Apr 21, 2009 9:39pm EDT
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By Jason Szep

SOMERVILLE, Massachusetts (Reuters) - After one of the worst slumps in memory, the housing market in the Northeast United States is stirring to life with more buyers on the prowl and bigger crowds at home showings.

But few are in a rush to buy and many of those willing to spend find it hard to get mortgages, suggesting a strong recovery is still some way off and those hoping for a swift return to the go-go days will be disappointed.

Many home-buyers are like 26-year-old Jessica Doctoroff, who is taking her time as she hunts for her first home in the densely populated neighborhoods around Somerville, a middle-class Massachusetts city that neighbors Boston.

After years of renting and living with roommates, the insurance manager wants her own home and is ready to buy. She's viewed about 20 condominium apartments since February and has seen plenty of bargains get even better.

One two-bedroom apartment had its price cut by $25,000 and another was reduced just 10 days on the market.

"I don't feel like there is a rush," she said after viewing a 1,177-sq-ft (109-sq-m) two-bedroom apartment priced at $499,000. "There's a lot more people coming out to look at these places, that's true, but there's a lot more property on the market."

Massachusetts was one of the frothiest markets in the boom. In the first quarter of 2000, the state ranked first in the pace of year-on-year house price rises in the country. And from 1995 to 2004, home sales notched double-digit growth.

But the recession is hammering the region. Home sales fell by 11 percent year-over-year in February in Massachusetts, 15 percent in neighboring Rhode Island, 22 percent in Maine and 26 percent in Connecticut, according to the Federal Reserve's "Beige Book" survey of economic conditions released last week.   Continued...

<p>Prospective home buyer Jessica Doctoroff tours a condominium for sale in Medford, Massachusetts, April 2, 2009. REUTERS/Brian Snyder</p>