Real estate market enters choppy seas

By Kathy McCabe, Globe Staff
November 7, 2004

The Pittsburgh Steelers may have snapped more than the Patriots' historic 21-game winning streak. They may have unwittingly boosted Anne Torcivia's chances of selling a few more houses around Malden, Everett, and Revere.

''Try having an open house on a Sunday afternoon, when the Pats are on TV and they're winning," said Torcivia, a veteran Malden realtor. ''You're not going to see anyone, trust me . . . Maybe now that their streak is over, people will think about coming out."

She may have a shot, if Pam Cote's post-World Series triple play is any indicator. She sold three houses just after the Sox came home as World Champions from St. Louis. ''Everyone looked a little fatigued from staying up late," said Cote, president of the North Shore Association of Realtors in Danvers. ''But all three went under agreement. . . . Before that, everyone was so focused on the games, they weren't thinking about moving."

The real estate market north of Boston is hardly cursed, but realtors might not be hitting home runs any time soon. Blame it on fans' obsession with the hometown teams, or election-year jitters, but home sales around the region are slowing, local realtors say.

Supply is outstripping demand for the first time in years. There are more ''For Sale" signs on homes and condominiums across the North Shore and Merrimack Valley. Some market segments are still strong, particularly condominiums and starter homes, but properties overall are taking longer to sell and prices are dropping, they said.

''We're way past the stage where a seller could put a property at almost any price and have a buyer buy it, almost immediately," said Ruth Pino, manager of Carlson GMAC Real Estate in Gloucester. ''The pent-up demand isn't there like it was, but we had seven years of escalating market values. It had to come to an end and stabilize."

''Things are slowing down a bit from their heyday," said Paul Consoli, a 20-year realtor at Ben Consoli Realtors in Haverhill. ''Prices have been brought more in line with reality . . . But that doesn't mean demand has shifted terribly. It's fall and people have been preoccupied with the election and the Red Sox, and even just the nice fall weather."

Just how much the market has shifted is hard to tell. Third-quarter real estate sales won't be released until Nov. 15 by the Massachusetts Association of Realtors, the state's largest real estate trade group. Locally, second-quarter sales, covering April to June, were better than a year ago, according to the association.

On the North Shore, 1,195 single-family homes were sold, compared with 921 in the second quarter of last year.

The median selling price jumped to $374,000, from $339,000 the year before, according to the association's data. In Greater Newburyport, 173 single-family homes sold during the quarter, compared with 170 in the same period last year. The median price increased to $419,900, compared with $377,000 in the second quarter of last year, data shows.

The strong second-quarter gains convince some that the market is still healthy. ''Our numbers, year to year, were pretty strong," said Craig Holt, president of the Greater Newburyport Association of Realtors. ''The market has slowed down now, but I'm hoping that was pre-election jitters. Hopefully, now, there won't be a post-election funk."

''There are more homes for sale now," said Cote, whose group covers the North Shore, Cape Ann, and Haverhill. ''But I still think the demand is still there."

But the most recent statewide monthly data shows demand, and prices, may be easing. In September, the number of single-family homes sold statewide fell 2.7 percent compared with the same month last year. The median sales price was $346,000, 11.6 percent higher than a year ago, but it was also the smallest pricing gain since May, data shows.

''The single-family market did show slight declines in August and September," said John Dulczewski, communications director at the association. ''But we had a strong July, and I suspect we'll end up fairly even in terms of volume. . . . Price adjustments have occurred, but that doesn't mean a home is dropping in value. It means the rate of appreciation is more moderate."

Historically low interest rates, which now are about 5.8 percent for a 30-year fixed rate mortgage, could entice first-time homebuyers into the market. After rates spiked in June to 6.5 percent, many first-time buyers stopped looking, Dulczewski noted.

''Some entry-level buyers may have been knocked out of the market temporarily, but I suspect we'll see a lot of first-time buyers get back into the market now that rates are down," he added.

One industry watcher agreed that favorable interest rates should keep the market moving. ''Rates are still very attractive," said Cindy Merkle, senior vice president of mortgage banking at Eastern Bank in Lynn. ''And that's a very good thing for purchases. People can still afford to buy homes."

Eastern offers one clue people are still in the market. Home purchases now account for 70 percent of the bank's residential mortgage business, compared with a year ago, when refinancing peaked, Merkle said.

''Our numbers almost flip-flopped," she said. ''I think we reached a saturation point with refinancing. A consumer does it once, twice, three times and they're done."

Realtors, who note home sales typically slow down over the holidays, hope the stable rates boost activity by the year's end.

''The interest rates are still good," said Tom Lynch, president of James A. Lynch Real Estate in Lynn. ''And I think that will help keep people in the market. We're still putting houses up for sale, although the run-up in prices has definitely slowed."

''The sky isn't falling," said Holt, a Newburyport realtor. ''The interest rates have stimulated the market, but we need more people to say, 'I'm going to go out now and buy a house.' "

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