December 28, 2009 | last updated March 24, 2012 8:12 pm

Expert Predictions: Real Estate | Is the local housing market headed for recovery?

At least for many types of real estate, prices aren't ready to rebound, according to real estate investor Russ Haims. Haims runs Hampton Properties LLC and Haims Investment Group Inc. in Worcester. But whether the lack of a rebound is a bad thing depends on where you're standing.

Haims said the federal tax credit for first time homebuyers, which has been extended through April 2010, has bumped up demand, but only temporarily.

"I see more factors that indicate a downward trend than anything encouraging to bring it up," he said.

It doesn't help, Haims said, that foreclosures are continuing to stack up on the market.

"The banks presently are overwhelmed with what they have already in their delinquency pipeline," he said. "There's still going to be a lot of cheap inventory that banks are going to be looking to sell."

Haims said the next year should be a good time to buy dirt-cheap property, as long as buyers are aware that they're likely to be getting what they pay for.

"Strong properties, strong locations still command decent prices," he said.

For those with good credit and some cash on hand, it could be a good time to buy, Haims said. The tighter credit market means these buyers won't be competing against buyers putting zero down on a home they can't really afford.

Haims said the current market has a positive side for investors and property managers like him. At least in the Worcester market, rents are up. And the fact that run-down properties are selling cheap leaves more room in the budget to do a good rehab job.

Jeff Hall, president of the Worcester Regional Association of Realtors, says government policies will be a key to getting property moving in 2010.

The most obvious federal incentives are the tax credits for new homebuyers and those moving after five years in their current homes. Hall said the first-time buyers' credit made a big difference in Greater Worcester in 2009, and he expects more people to take advantage of it now that it's been extended.

"And, needless to say, by stimulating the first-time homeowners, it means people will be moving up," Hall said.

Hall said another initiative under consideration at the federal level could make a big difference in the local market by making short sales easier. The proposal would let sellers get preapproval from their lenders to sell their houses for less than the outstanding mortgage amount.

Right now, Hall said, many short sales fall through as lenders take as much as eight months to consider an offer. He said he thinks more than half of short sales end up not going through because buyers get frustrated with the process and move on.

Hall said the market is still facing an inflow of foreclosures, but lenders are making a conscious effort not to let them disrupt price levels. Many are trying to use loan modifications to keep people in their homes, or at least help owners stay in their homes in the short term to minimize the amount of property sitting empty.

"It won't be like a flood," Hall said. "They will space it out over time so there is just kind of a regular flow of foreclosures into the market."


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