Home Sales Drop in February

The Massachusetts Associaten of Realtors (MAR) reported earlier this week that sales of single-family homes dropped 23% in February when compared to the same time period last year. There were 1,857 single-family home sales in Massachusetts last month, compared to 2,409 in February 2007.

Median sale prices dropped 4.6% from $325,000 in February 2007 to $310,000 in February 2008. The February 2008 figure was also down 3.4% from January levels, when the median price was $321,000.

For condominiums, the drops were even more substantial. There were 827 condos sold in February 2008, a 35% decrease compared to February 2007. And median sale prices of condos were down 6.7% from $270,000 in February 2007 to $252,000 in February 2008.

Fewer New Agents

Sale prices aren't the only things that have been declining in the local real estate market recently. The Massachusetts Board of Registration of Real Estate Brokers and Salespeople issued 5,771 new licenses in 2007. While that sounds like a lot, it represents a 40% drop from 2005, when 9,550 new licenses were handed out.

FHA Increases Loan Limit

The Federal Housing Administration (FHA) has increased the amount that buyers can borrow when purchasing a home, which may spark additional buying activity, especially among buyers who would otherwise be forced to use "jumbo" mortgages with higher interest rates.

Under the new limits, buyers can borrow up to 125% of the median sale price in the area. In Norfolk and Plymouth counties, this means the loan limit for an FHA loan is increasing to $523,750, and qualified buyers can obtain an FHA mortgage with as little as 3% down.

For more information about the new FHA rules, or a referral to a mortgage professional who can discuss your specific needs in more detail, please contact Shep, Bob, or Florence at 781-767-5550.