Mixed Market: Newly renovated homes for sale on Hendry Street. Photo by Chris LovettCrosscurrents in Dorchester’s real estate market are pulling in different directions—extending the fall-off in prices of the past two years, but also showing signs of new vitality.

“If someone’s telling you there’s no business, they’re not in our neighborhood,” says the Dorchester office manager for Jack Conway & Co., Julie Simmons.

“There is a lot of activity now,” she says. “That $8,000 tax credit is really bringing people in.”

But even agents who vouch for people willing to buy and sell say their customers still meet obstacles.

“Definitely the buyers are there. They’re eager to buy because the prices are low,” says Patrick Dorcena, an agent who does business in Dorchester for Torrez Realty in Brockton. “What’s killing us are the banks.”

Working in favor of a turn-around in the market is the federal tax credit created primarily for first-time home-buyers. But tighter lending standards, especially for condos, have been holding off buyers who fail to qualify for government programs. And Dorcena says some lenders have been challenging sales prices with their own appraisals, or pulling out of deals at the last minutes, slowing down sales by as much as six months.

According to figures collected by the Warren Group, the spring market in Dorchester hardly appears robust. Sales of single-family homes through the end of May are down from last year’s total by almost 20 percent, though the median price is slightly higher.

Condo sales in Dorchester are much more numerous, and they exceed last year’s total through May by more than 6 percent. But, over the same period, the median price for those units is down by almost 60 percent.

The owner of Just In Boston Properties, Justin Green, says the aggregate price for condos is “totally askew” because of the numerous distressed sales, often after foreclosures.

Many condo units in distressed sales have been selling for less than $100,000, and some for less than $50,000. But, in less than 2½ years, prices for one unit on Bellflower Street, just a few blocks from Andrew Square, have swung sharply both ways. In January, 2007, unit 3 sold for $360,000. All three units would later be foreclosed. After unit 3 was sold last November for $121,500, it was sold again in May of this year for $299,000.

According to Green, the streets between Edward Everett Square and Andrew Square are one housing market that could be poised for an upturn. And he says the same potential exists in other parts of Dorchester close to the Red Line.

“It stands to reason,” he said, “that something along a train line, a train line that’s been renovated, is a location that’s going to be in demand.”

And, just a few blocks from JFK/UMass station, a loft unit at 950 Dorchester Avenue sold in May for $410,000.

Between the extremes are unit sales with a fall-off in price that’s less dramatic, though still sizable. One example is a three-decker unit on Sawyer Avenue, on Jones Hill. It sold last month for $250,000, after having been on the market last summer for $279,000. The seller bought the unit almost five years ago for $309,000.

Though the tax credit for first-time homebuyers is scheduled to expire later this year, Green says the condo market in Dorchester could be in for some relief from new rules being introduced by the Federal Housing Administration (FHA). Starting October 1, the FHA will insure some mortgages for condos in buildings up to 4 units. That would make financing available with down payments of 3.5 percent. With conventional loans, the current down payment required on many condo units for buyers without serious credit problems can run as high as 20 percent.

Like Simmons, Green says there has been more activity recently, and he describes the spring housing market in Dorchester as “very strong,” with “a lot of sales.”

“We’re very busy here,” he said. “Not only is everybody working, but putting deals together and getting financing.”

But Simmons points to signs that recovery is still a way off.

“People aren’t moving as often as we would like in this business,” she said.

And the backlog on sales has an effect on rentals.

“A lot of rentals are sitting on the market there, and a lot of condos are being rented,” said Simmons.

“So regular condos,” she explained, “have to compete against the granite and stainless steel.”

Simmons says that makes for more of a renter’s market. But other agents say rents in Dorchester are holding steady, with prices mostly in the range of $1,100 to $1,300 a month. And Green says his agency sees more customers looking for apartments.

“The price of renting hasn’t increased too much,” he said, “but the demand has definitely increased.”

The senior organizer for City Life/Vida Urbana, Steve Meacham, says there have been “significant rent increases,” even in neighborhoods that bore the brunt of mortgage foreclosures.

“Banks were holding so much property off the market in low and moderate income neighborhoods in Boston,” he said, “that it was pushing up the rental market.”

Also seeing little relief for renters was the director of media and public relations for the city’s Department of Neighborhood Development, Lucy Warsh.

“We still have a major need for affordable units in most of the affordable neighborhoods, such as Dorchester and Roxbury,” she said.

In parts of Dorchester with more multi-family housing and a higher concentration of foreclosures, unit sales are often to investors buying in bulk. The city has turned over some foreclosed units in three-deckers, but with an eye toward having them redeveloped as rental property, preferably with an owner-occupant in one unit.

The director of the city’s Department of Neighborhood Development, Evelyn Friedman, says more than one-third of Boston’s mortgage foreclosures were in condominiums, many created in three-deckers.

“We’re seeing that it’s not the best model for the three-deckers, unless you have a more affluent group,” said Friedman.

“One of the big challenges of a small condo association,” she argued, “is that if you have one person stop paying the condo fees, the whole association falls apart.”

The treasurer for the Dorchester Home and Garden Trust, Patrick Cooke, predicts recovery will be significantly slower in areas with the most foreclosures. And he says the foreclosures and the economic downturn are also cooling off the rental market.

“I don’t think it’s going to drop precipitously,” he said, “but it’s into a long, slow decline, and landlords are going to have to adjust their expectations.”

Cooke has been renovating houses in Dorchester for thirty years, and he has seen earlier downturns in the 1980’s and 1990’s.

“The downward pressure on the market is going to continue to be felt for some time,” he predicts.

In Dorchester’s multi-family housing, Cooke likens the latest downturn to a “can of worms,” confronting potential buyers with the expense of aging properties and the hurdles left by collapsing or non-functioning condo associations.

“The market,” he said, “almost has to get worse in order for these things to be salvaged.”