Cheap home foreclosures for sale are driving sales of single-family homes in the Massachusetts counties of Franklin, Hampshire and Hampden in the third quarter. Majority of sales were made by first-time buyers who were encouraged to make real estate purchase by the federal government’s $8,000 tax credit. A great number of first-time buyers come swopping in the region to grab foreclosure properties that are below the market value.
Home sales from July to September increased by 10.1 percent to 1,347 compared with 1,223 for the same period last year. But the median sale price dropped by 6 percent to $192,800 from $205,000 in the third quarter of 2008.
According to industry experts, many buyers are looking for older three-bedroom houses with one to two bathrooms, in good condition and located on quarter acres lot. These houses are in the price range of not more than $200,000. They said that many houses in the higher-end price spectrum are languishing on the market because buyers prefer to buy home foreclosures for sale that in the low-priced end.
Experts said that buyers may be hesitant to venture into higher-priced houses because of economic uncertainties, low consumer confidence and high unemployment rate. Additionally, the high cost of energy is also driving buyers to look for smaller, energy-efficient houses that are closer to places where they are working.
Furthermore, the increasing interest in modestly priced houses is driven by the 5 percent interest rate and the federal tax credit of $8,000 provided to first-time home buyers. And the looming expiration of the federal tax credit by November 30 has first-time buyers scampering to close deals before the deadline. But there are lobbying efforts to extend the tax credit and expand its coverage.
In Hampden County, home sales increased by 9.4 percent to 859 in July to September from 785 in the same quarter the previous year. Meanwhile, the median home price dropped by 3.8 percent to $177,900 from $185,000.
In Hampshire County, home sales rose by 8 percent to 310 from 287. In Franklin County, home sales rose by 17.9 percent to 178 from 151. Industry experts believed that cheap home foreclosures for sale will continue to drive up home sales and pull down market prices and values in the coming months.
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