By Rita Savard, The Sun, Lowell, Mass.
Nov. 3--The phones are ringing. People are yelling, running and grabbing their checkbooks.
Realtors Dennis and Donna Ready haven't seen the likes of it in a couple of years -- a fever pitch from first-time homebuyers trying to outbid each other.
After a recession-driven hibernation, competitive bidding is back, real-estate agents say, and it's inflating offers on homes in Greater Lowell.
"We saw volume started to pick up a little bit last year," said Donna Ready, an agent for Century 21 Landmark Realty. "Then the government threw in the $8,000 tax credit and poof! The lower-priced properties took off to the point where there were bidding wars."
The homebuyer credit was a key element of President Barack Obama's $787 billion stimulus package enacted last February. Under the measure, low- and middle-income first-time homebuyers purchasing a home between Jan. 1 and Nov. 30 of this year can claim a credit of up to $8,000 on their 2008 or 2009 income-tax return.
While median selling prices are still down 4.1 percent, from $318,000 in 2008 to $305,000 in 2009, according to the Massachusetts Association of Realtors, home sales have risen 5.6 percent. Experts take the news as a sign that the long-suffering real-estate market might have found some footing as bidding wars bring sellers closer to their price mark.
When a gray split-entry at 15 Henry J. Drive in Tewksbury went on the market recently, the Readys knew it would generate interest. Located in a nice, quiet tree-lined section of town, the home features three bedrooms, one-and-a-half bathrooms, two fireplaces and a family room in the basement. The listing price was about $284,900.
Eight bids flew in.
The Readys can't disclose what the house actually sold for, but they said the tax credit has spurred a flurry of first-time buyers looking to lock in a deal before the Nov. 30 deadline.
"We had one gentleman that put in five bids on different properties before he found one that worked in his favor," Dennis Ready said.
Sales data from the Multiple Listing Service show that sellers of single-family homes throughout the Merrimack Valley received nearly 100 percent of the listing price for the month of October. In Chelmsford, for example, nine single-family homes sold at an average of 99 percent of the listing price, which was $394,617. In Tewksbury, 15 homes also sold at an average of 99 percent of the average $350,400 listing price.
The increase in area home sales also reveals some troubling news, said Middlesex County Register of Deeds Richard Howe Jr.
Data for Middlesex County shows an uptick in the number of Orders of Notice, the document that kicks off the foreclosure process.
"That suggests a new wave of foreclosures is about to strike the area," Howe said.
Earlier this year, analysts forecast another 7 million homes going into foreclosure throughout the country. The difference this time around, according to Donna Ready, is that foreclosed properties aren't just sitting around.
"Buyers are taking advantage of record-low mortgage rates and the tax credit, and they're snapping up cheaper foreclosed properties," she said. "We've been getting offers from people before they've even set foot inside the property."
More than 1.2 million borrowers have claimed $8.5 billion of the $13.6 billion set aside for the home-buyer tax credits this year, according to the Treasury Department. The National Association of Realtors estimates that 350,000 borrowers would not have purchased their homes without the credit.
In an effort to help further the shaky housing market's recovery, members of Congress are looking to extend the homebuyer credit as early as next week, despite a probe sparked by an IRS watchdog group that found several fraudulent claims.
At one end, House Majority Leader Steny Hoyer, D-Md., said the program should be extended for a month while lawmakers take another look at how it's being run. On the other end, Sen. Johnny Isakson, R-Ga., with the backing of banking committee Chairman Christopher Dodd, D-Conn., wants to extend it through next June 30, and expand it to include all homebuyers at an estimated cost of $16.7 billion.
The Readys said real-estate agents everywhere are keeping their fingers crossed for an expansion of the credit that would include a broader number of homeowners.
"That could sustain the market well into next year," Donna Ready said. "More sales will also prevent more foreclosures from sitting on the market for too long."
The Associated Press contributed to this report.
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