Business

Real estate market is perking up

To buyers’ surprise, bidding wars are back

“I never expected to get the reaction that we did,” said Marie A. Presti, a Newton real estate broker, who received 18 offers in five days for a Roslindale house.

SUZANNE KREITER/GLOBE STAFF

“I never expected to get the reaction that we did,” said Marie A. Presti, a Newton real estate broker, who received 18 offers in five days for a Roslindale house.

Like flowers and trees, the region’s spring housing market has blossomed earlier and more vibrantly this year, fed by balmy weather, pent-up demand, and newfound optimism among prospective buyers, real estate specialists say.

Real estate agents are reporting bidding wars for homes in downtown Boston, Cambridge, Somerville, Natick, Roslindale, and other communities. That is coming as a shock to prospective home buyers who believed years of grim housing news would give them an advantage over sellers.

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“I’m absolutely, completely blown away as to how the market is behaving,’’ said Andy Silverman, 32, who wants to buy a home in Newton or Brookline, but has found some listings under agreement before he can even arrange tours. “I would describe it as people trying to get on the last lifeboat on the Titanic.’’

Gary Dwyer, owner of Buyer Agents of Boston LLC, said people interested in buying are packing open houses. They are either convinced that the market has finally bottomed out and is now headed up, he said, or eager to ditch their escalating apartment rents for fixed-rate mortgages, which have been rising modestly.

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“They know the Boston real estate market isn’t going to crash,’’ said Dwyer. “You are getting a lot more folks saying this is now the time to buy.’’

The state’s home-buying season typically does not gain momentum until March - when inventory begins to grow - but this year’s numbers show many buyers were already out in January and February. Single-family home sales in the Boston area increased by about 37 percent last month compared with February 2010, according to the Massachusetts Association of Realtors. Regional condominium sales - including Essex, Middlesex, Norfolk, Plymouth, and Suffolk counties - were up more than 22 percent, according to the trade group.

The robust market is lifting the hopes of real estate professionals who have endured slumping sales since late 2005 when housing prices peaked in Massachusetts. The number of single-family home sales statewide last year dropped to the lowest level in two decades, according to Warren Group, a Boston company that tracks local real estate.

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Regional home values declined about 20 percent between 2005 - when they were at their highest - and early 2009. Since then, prices have bounced along what many housing economists believe is a bottom - currently about 19 percent below the top of the market, according to the S&P/Case-Shiller Home Price Indices, which tracks real estate nationwide. The median price for a single-family home in the Boston area last month was $304,900, 2.1 percent less than during the same period in 2011, according to the Massachusetts Association of Realtors, using data from Shrewsbury-based tracking firm MLS Property Information Network, Inc.

John Ranco, senior sales associate in the South End office of Hammond Residential Real Estate LLC, said there has been a sense of urgency at open houses this year.

“Something is different. There has been a shift in attitude,’’ Ranco said. “I have buyers that are very savvy, very smart, high income. They are stunned that it is not a buyer’s market anymore.’’

Newton real estate broker Marie A. Presti said she recently put a two-family Roslindale home up for sale at slightly below market price, with the stipulation that the buyer pay in cash. Presti said she received 18 offers in five days, with 16 of them from developers. The winning bid - which she would not disclose because the deal has not yet closed - was tens of thousands of dollars above the asking price.

“I never expected to get the reaction that we did,’’ Presti said. Developers are especially interested in getting into the market this spring, she said, because they know “it is going to go up.’’

Melvin Vieira Jr., a real estate agent in Milton, said prospective buyers are on the hunt in both higher and lower income communities. “If the property is priced right, there is a frenzy,’’ he said.

In some parts of the state, foreclosures are inhibiting overall home values, and have been on the increase this year as lenders work to unload properties that have long been in default. In January and February, 1,398 Massachusetts homes were seized, 33 percent more than during those months in 2011, according to Warren Group.

‘I never expected to get the reaction that we did.’

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But even in Worcester, which was hit hard by the foreclosure crisis, there is a revived interest in buying and selling homes not connected to the distressed-housing market, said Erika Hall, an agent with Keller Williams Realty Greater Worcester. Hall said that in the past month she has received multiple bids on two properties that were not in foreclosure. That is unusual in a region where values have been depressed by a flood of bank-owned homes.

“It has been a long time since I’ve seen this type of activity,’’ she said.

In addition to the possibility of higher prices, prospective buyers are watching mortgage rates. Guy Cecala, publisher of the Maryland-based industry newsletter Inside Mortgage Finance Publications Inc., said the rate for a 30-year loan recently inched up from about 3.9 percent to about 4 percent. He expects rates to range between 3.9 to 4.25 percent this year. That’s still unusually low, but even a modest boost might push some people to act, Cecala said.

“This is a wake-up call that we were at the bottom,’’ he said of the one-10th of a percentage point gain.

Alex Coon, Boston market manager for the online brokerage firm Redfin, said the spring market began in late winter because the warm weather motivated people to attend open houses. Last year, the housing market did not start moving until late February. The number of homes available is higher than at this time last year, he said, but it is not enough to meet added demand.

“Almost every single one of my agents is in a multiple-bid situation,’’ Coon said.

But brokers say that does not necessarily mean prospective home buyers need to grab their checkbooks and madly rush from one open house to the next.

As more people decide to put their homes up for sale this year, Coon said, the expanding number of choices for prospective buyers will calm the bidding blitz underway in some neighborhoods.

And while the spring market is hot in many places, Matthew Montgomery, a senior sales associate with Brookline’s Hammond Residential Real Estate, predicts cooler days ahead for those willing to wait.

“It will slow down,’’ Montgomery said, “and by May or June it will be quiet.’’

Jenifer B. McKim can be reached at jmckim@globe.com.
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