On a Sunday afternoon in Dorchester’s Pope’s Hill neighborhood, it’s hard to turn a corner without seeing a sign for an open house. In most years, the signs would only be expected for the last month of winter. But, after two years of sharp decline in much of Dorchester’s housing market, the signs are a welcome sight.
“I had an open house with fifty people the other day,” said Craig Galvin, the director of sales and marketing at The Galvin Group. “I haven’t had an open house with fifty people in five years.”
The activity follows an increase in sales and prices throughout Boston for the month of December. According to The Warren Group, even Dorchester had more sales of single-family homes than in the previous December, and their median price was up by 25 percent.
In January, The Warren Group reports that sales of single-family homes in Dorchester increased from 8 to 14, with the median price rising above the figure for January 2009 by 16 percent.
For condos, the increase in sales was almost 46 percent, with the median price falling by less than 3 percent. That’s a much smaller decrease than the figure from a year earlier, when distressed sales helped pull down the median price for condos in Dorchester by more than 69 percent. Galvin says the figure for condos in January of this year probably means that prices for normal transactions are on the way up.
Even more positive was the conclusion in a survey published after the end of 2009 by the Dorchester agency, Just in Boston Properties: “It’s true -- the bottom of the market has come and gone.”
One incentive for demand is the $8,000 federal tax credit mainly for first-time home-buyers that has been extended until June. To meet the deadline, it’s expected those buyers would have to get a property under agreement by the end of April.
Buyers can also take advantage of low interest rates, though time for these is starting to run out. The Federal Reserve Bank plans to buy its last batch of mortgage-backed securities in March. With an early signal of interest rates going back up, buyers have reason to purchase sooner.
“I think that people are getting the feeling now is an excellent time to get in and buy,” says the owner of Just In Boston, Justin Green.
Other agents confirm that prices in Dorchester are back on the upswing partly because the supply of properties on the market is getting smaller. According to Just In Boston’s “InSight Report,” sales of properties taken by foreclosure have been tapering off. And distressed sales were thought to be a main reason why the median price for condos in Dorchester fell last year by almost 50 percent.
“Inventory is down for good properties, so there is high demand,” says Julie Simmons, Sales Manager and Realtor at the Dorchester office for Jack Conway Realtors. “When something good comes on the market, there are a lot of people looking—at certain prices.”
Green also reports more activity. “From our experience, it is increasing enormously—the amount of people coming out of the woodwork either to buy or sell,” says Green.“We are finding the things we are putting on are receiving a tremendous amount of activity,” he added. “People are looking, and people are definitely buying.”
According to the “InSight Report” on the last quarter of 2009, some were even buying condos in the mid-$300,000 range in the areas of Columbia-Savin Hill, Jones Hill, and the “Polish Triangle” near Andrew Square.
The report also identifies as the “hottest” part of Dorchester’s market the neighborhoods along the Neponset River, from Pope’s Hill to Lower Mills. Though prices increased in these areas in the last quarter by only 2 percent, the sales volume was up by 13 percent.
Agents agree that many of the properties recently sold in Dorchester are three-decker units already converted into condominiums. “There’s plenty to pick from in the $230,000 to $260,000 range,” said Simmons. The prices are well above what some three-decker units were selling for right after distressed sales. But the prices are also much lower than they were at the height of Dorchester’s housing bubble, when some three-decker units that would later end up in foreclosure were going more than $400,000—at least on paper.
“There’s a normalization going on in the marketplace,” says Simmons.
Agents say much of the current demand is coming from people renting in other parts of Boston and adjacent communities such as Somerville. They can’t afford to buy in their own neighborhood, so they look for something with a similar flavor where they can afford to be,” said Simmons.
Galvin says the buyers are attracted by Dorchester’s civic and arts organizations, the convenience of public transportation, and the series of improvements along the Red Line, currently in its last phase at Ashmont Station. “There are good deals out there in good neighborhoods,” says Galvin, “and houses sell quickly when they’re priced right.”
Though some of last year’s barriers to financing have been eased, and though Galvin says potential buyers are better prepared, he also notes that approving a loan takes more time, more verification, and more phone calls. “It adds a huge amount of stress to the process,” he explained, “because the seller isn’t confident it’s going to close until two days before the closing or the day of the closing.”
A deeper cloud over the market is the economy. Observers expect another wave of distressed sales by home-owners who have lost jobs. Green says this will put downward pressure on prices, though not as much as the rash of foreclosures in the last two years.
But Simmons says even home-owners worried about their jobs will be reluctant to put their property up for sale. “If you’re not sure you’re going to keep your job,” she said, “you’re afraid to move.”