Wednesday, October 21, 2009

Who is buying homes in Lowell?

While real estate is not exactly booming in Lowell these days, many homes are selling. That invites the question, who is it that’s buying them? Our records don’t easily answer that questions but with some analysis and a little effort we can draw a picture that should be fairly accurate. As a sample, I looked at sales in Lowell where the purchase price was more than $50,000 (foreclosures were not included in this set).

In January 2009 there were 63 such sales. Of that group, 23 (or 37%) involved banks selling to third parties after the bank had foreclosed on the property (and by “bank” I mean any lending institution including mortgage companies). Five more properties had banks as sellers but with no foreclosure in the property’s immediate past. This means that 28 of 63 (44%) of the properties sold in Lowell in January 2009 had a bank as the seller.

Since all Massachusetts deeds are supposed to include the mailing address of the buyer, we can look at the deed to determine where the buyer is from. In generally, if the buyer is moving into the house being purchased, that’s the address that’s listed, but if the buyer is an investor, another address is given. In the case of the 28 properties that were sold by banks, 13 of the buyers listed Lowell as their address; 8 listed somewhere other than Lowell; and 7 listed no mailing address. Applying that same test to all of the 63 properties sold that month, we find that 36 (57%) were purchased by buyers listing a Lowell mailing address; 19 (30%) by buyers listing a mailing address outside of Lowell; and 8 (13%) listed no mailing address.

In the coming days, we’ll collect this data for several other months in 2009 and try to draw a clearer picture of just who is purchasing homes in Lowell these days.

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