Anyone looking to re-live the glory days of Filene’s Basement’s annual bridal sale last month – you know, getting half-crushed by a mad crowd eager to grab a bargain – need have looked no further than their local real estate office.
Brokers and agents across the state said the expiration of homebuyers tax credits last week created a surge of interest, with clients rushing to sign a contract on a home before the April 30 deadline to qualify for tax breaks of up to $8,000 for first-time homebuyers and $6,500 for established homeowners looking to move.
“For the past two weeks, it’s been like a feeding frenzy, everybody trying to get this in under the wire,” said David Shortsleeve, sales manager for Coldwell Banker Residential Brokerage in Worcester. “It’s been extremely busy and [the expiration of the credit has] absolutely been driving this.”
The Worcester market typically features a substantial number of first-time buyers, Shortsleeve said. But even inside Route 128, where homes are generally more expensive, the credit, and its impending expiration, seemed to have a noticeable effect.
“It’s been pretty active the last few weeks,” said Amleto “Mel” Martocchia, broker/owner of Martocchia Realtors in Waltham and president of the Greater Boston Association of Realtors. “I think I started really noticing more towards the middle of March.”
Many neighborhoods in Boston itself also saw a lot of activity in the days and weeks leading up to the tax credits’ expiration.
“[Jamaica Plain], South Boston, Charlestown, Roslindale – in those areas I’ve definitely seen a bump in interest where I think that the tax credit definitely is a driver,” said Kathleen Alexander, a Keller Williams agent based in Boston’s Back Bay.
Keeping Momentum Going
“People on the fence, it’s spurring them to buy. You’ve got to be nuts not to,” said Karen Adelson, of Lexington’s Higgins Group Realtors. “I had one client who was looking for houses two years ago, and stopped, saying, ‘eh, we’ll think about it later.’ And when this first came out they called me up and said, ‘it’s not going to get better than this,’ and they bought.”
“It has been wonderful,” she added. “There’s been a lot of sales in Lexington in reasonable price ranges – in all prices ranges, actually – that have been spurred by [tax credits], and I’m dreading it ending.”
Others are less fearful of the end of the credit.
“The market is really interesting right now. [Nobody] knows what’s going to happen when the credit goes away,” acknowledged Jay Hummer, executive vice president of Re/Max of New England. But he suggests that “this tax credit has been out there so long at this point – though there may be people out there who still want it – we’ve seen other parts of the real estate market start to move in the last few months.”
Still, the credit-driven surge in interest has inspired some of the bigger brokerages in the region to try and convince sellers to chip in and mimic the credit once it expires.
Coldwell Banker and Prudential Connecticut Realty recently announced seller opt-in programs providing 3 percent of the selling price, up to $8,000, as an incentive to buyers. The seller-provided incentive would be applied to all potential homebuyers, not just first-timers.
Rick Loughlin, president of Coldwell Banker Residential Brokerage in New England, said the firm was expecting about a 3 percent to 6 percent response on its listings. He said he expected more sellers to sign up in the days leading up to the program’s kickoff on May 1.
“Some people obviously have no interest,” in dropping their price, said Loughlin. “[But for] some people who have been on the market a while, it may be something that would get people more interested in their listing. We’re taking every approach to keep the momentum going once the federal tax credit expires.”
Some are hoping that momentum is carried forward by potential homebuyers who may have put off buying a home realizing the time to buy is now.
“Bottom line, at some point, house prices have adjusted and [people] need a place to live,” said Martocchia.
