RE/MAX of New England Executive Vice President Jay Hummer, who overseas 275 RE/MAX offices and 3,400 sales associates throughout the region, says the housing market is starting to show signs of recovery. He took some time recently to speak with Providence Business News about the market and the role of first-time homebuyers and tax credits.
PBN: RE/MAX has released some figures that seemingly point to the housing market recovering. Can you expand on the numbers a little?
HUMMER: In our 2009 Q3 & Q4 Housing Market Outlook and Forecast we survey RE/MAX agents from across New England to identify trends and solicit feedback within their regions. What was most encouraging is that we are seeing an increase in transaction activity, and even though the median home prices are still down, we are seeing steady increases throughout the Northeast region. Locally, sales of single-family homes and condos in Rhode Island increased 6.1 percent in the second quarter compared to the same time last year. The bulk of these transactions are in the $150,000 to $250,000 range, and it is also interesting that transaction numbers in Rhode Island are far surpassing the national increase.
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PBN: What impact has falling home prices had on sellers?
HUMMER: Fallen prices have allowed many buyers to purchase homes that they may have been priced out of even two years ago. The affordability index has given the seasonal adjustment a real boost, with first-time homebuyers taking advantage of the first- time homebuyers tax credit, and investors jumping back into the market in a big way.
PBN: How large a role have first-time homebuyers played in the market recovery?
HUMMER: It’s played a significant role; in fact right now first-time homebuyers are driving the market. First-time homebuyers are aware of the $8,000 tax credit. In fact at RE/MAX we have delivered public service announcements that are geared toward educating the public on this message, and with the delivery of our quarterly reports we continually drive this message throughout many media outlets. If you are a first-time homebuyer there has never been a better time to purchase a home.
PBN: How large of a role has the federal first-time homebuyer tax credit played?
HUMMER: To put it into perspective, in a way this has been the real estate industry’s Cash for Clunkers — a much needed boost for consumer confidence. First-time homebuyers looking to take advantage of the tax credit before the Dec. 1 deadline were the first stone in the water that has created a ripple effect in the industry that now has investment buyers coming back into the market.
PBN: What advice would you give first-time homebuyers?
HUMMER: This perfect storm of tax credits, low interest rates, and dropping home prices have created a huge opportunity for first-time homebuyers. If you wish to take advantage of this opportunity and especially the first-time homebuyers tax credit, remember the program is due to expire on Dec. 1, so get busy.
