Strong Spring Real Estate Market Forecast for Massachusetts

RISMEDIA, Feb. 19, 2007-The spring real estate market in Massachusetts is expected to be robust as consumers gravitate to attractive 30-year fixed loans and take advantage of the best buyers market in more than a decade, according to Richard S. Fedele, CEO of Summit Mortgage LLC, a premier, private Boston-based mortgage banking firm.

"With reduced home values, historically low interest rates and pent-up consumer demand, I think the spring real estate market will be a home run," said Fedele. "We are now seeing more affordability in the housing market than we've seen in years."

Fedele is bullish on the real estate scene despite a gloomy residential real estate picture over the past year. According to The Warren Group, a Boston real estate data provider, single-family home sales dropped 14.4% in 2006, with 54,203 homes being sold compared to 63,350 in 2005. Meanwhile, the median sale price for a single-family home dropped to $325,000 in 2006, down 5.8% from $345,000 in 2005.

The bleak data belies a new reality, according to Fedele. "Declining home prices are behind us," predicted Fedele. "The spring market will be solid and I expect some appreciation in home values by the end of this year."

Fedele bases his findings on a combination of additional national and local economic signs. For example, the Mortgage Bankers Association, a national industry trade group, reported recently that mortgage applications were 1.7% above their level one year ago. Locally, Summit Mortgage closed $111 million in loans in January, a 76% increase over the $63 million closed in January 2006.

Additionally, the current 30-year fixed interest rate on home mortgages stands at just over 6%, still one of the best historical rates. Fedele anticipates the Federal Reserve Board, which sets interest rates on overnight loans between banks and affects other consumer rates, will remain steady at 5.25% for the first half of the year before falling toward the end of the second half. "That will then spur an even better housing market," said Fedele.

Finally, Fedele is bullish on Massachusetts because it has not overbuilt over the years. "Massachusetts is solid because we're a resale area as opposed to an area with an overabundance of new homes," he said.

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