Despite Down Year, Experts Say Massachusetts Real Estate Has Turned Corner
It’s clear that Massachusetts mortgage demand continues to lag far behind 2005 levels, but two reports issued yesterday come to different conclusions about the housing market’s future.
The Warren Group, a provider of real estate and financial data throughout New England, showed a 6.9 percent drop in the median price of a single-family home, from $335,000 in October 2005 to $312,000 in October 2006, the Lowell Sun reports.
The Warren Group also showed single-family home sales down 14.9 percent from a year ago, while condo sales plummeted 19.5 percent in the same time period. CEO Timothy Warren Jr. said the Massachusetts housing market in still in the midst of a pronounced slowdown, but predicted that the market would stabilize late next year.
However, the Massachusetts Association of Realtors (MAR) believes the market has already stabilized, and buyers are out en force.
“With mortgage rates back down around 6 percent, the economy is growing again, and sellers have adjusted their prices to more realistic levels, making for terrific buying conditions,” said MAR President David Wluka.
That doesn’t mean Massachusetts mortgage costs are going to be cheap. MAR pegged the median price of a detached single-family home at $341,000 in October, just 2 percent below last October’s median price of $347,950. Condo prices were down 3.7 percent to $261,250.
According to MAR, the state’s once-scalding real estate market peaked in the summer of 2005, and year-over-year comparisons are now reflecting normal market conditions. Despite optimism, the association still reported sluggish sales. Single-family home sales slid 16.5 percent year-over-year, with 3,239 sold last month; condo sales fell 17.6 percent to 1,464 units.
The data was somewhat better than the numbers released last month: Before Massachusetts home loan costs tumbled for several consecutive weeks, sales of single-family homes fell 23.8 percent from September 2005, while condo sales fell 28.1 percent.
It appears 2006 will be remembered as a down year in the housing market. For the first 10 months of the year, Massachusetts single-family home sales are down 15.1 percent, and median prices are down 4.4 percent to $329,900, compared with the same 10 months in 2005. Condominium sales have fallen by 13.6 percent during the first 10 months, with the median sale price down 1.1 percent to $276,000.
Wluka said there is light at the end of the tunnel:
“For the better part of this year buyers having been waiting out the market, expecting a major correction. Now that prices have stabilized, buyers have started to move forward, making for a much busier market in recent weeks.”