Massachusetts Real Estate Market Outlook
The Massachusetts property sector is in a bust. Though it may not be surprising as the crisis’ pangs are felt all throughout America, the Bay State has yet to find its way out of the economic mess that it currently faces. Much of the blame goes to the fraud in Wall Street and the securitization of mortgages that fell in the doldrums. As such, the manufacturing and construction bases in the area are going downhill even more in 2009.
Boston remains as the economic hub of the state. Technology companies and tourism activities haul much revenue for the city. The real estate market had its heydays when massive high-rise construction fueled the industry to greater heights. However, the property market suffered from defaults and left only a few condominium projects unfinished. To this date, only developments at Copley Square and at North Station are pushing through, far from the number of proposals a few years back.
Boston’s property market is also plagued by adjustable rate mortgages. It is estimated that 10 percent of homeowners are unable to sustain their mortgage payments. Home values are forecasted to decline by 15 percent in 2009.
The New Bedford real estate market is at its previous levels nine years ago. With such a huge drop in home sales, sellers are forced put their homes at bargain prices just to dispose the properties. As foreclosures provide the gamut of minimal sales, more ARM borrowers are bound to surrender their homes this year. RealtyOutlook.com forecasts a 14 percent depreciation in the city’s home values.
If not for the students at Harvard University, Cambridge would have turned into a ghost town already. Old homes that were once priced buys among homebuyers are now in need of immediate buyers. There’s no significant real estate activity in view for the next quarter. ReatlyOutlook.com expects home values to drop by 15.5 percent this year.
Springfield’s home values are falling slightly slower than other cities’. Buyers can benefit from the City of Homes’ low cost of living and reasonably priced homes in the western area. Residents may have been experiencing the crisis as some businesses have relocated already but then again, healthcare, retail and insurance industries can compensate for this loss.
In Lowell, the fourth largest city in the state, home values have been pounded by the rise in inventory. As home sales remain bitter, the weak credit market has taken a bite out of the city’s bedroom community plans. The city is battered by the unbridled job cuts with the majority of this working class town’s labor pool severely affected. Lowell’s housing prices will be down by 13 percent this year.
Worcester’s broad range of industries provides less risk for a general downfall during the recession. The healthcare industry employs majority of its residents and should linger as a recession-buster industry. For a couple of years, the city’s home values have increased by a mile but the impact of the crisis has spoiled its run. Like in New Bedford, sellers are ready to offer their properties at below average rates. As this trend will remain throughout the year, Worcester’s home values are bound to plummet by 13.5 percent more.
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