Home Sales, Mortgage Activity Decline Across Massachusetts
A continuing slowdown in the Massachusetts housing market has pushed home sales down more than 25 percent in the quarter ending September 30 from the same period a year ago, while the median selling price for the Central part of the state dipped almost 4.5 percent to $290,000.
It was the sixth consecutive quarter of lower year-over-year sales, and the lowest summer sales quarter since 1995, the Worcester Telegram & Gazette reports.
While buyer demand has eased, lower selling prices and higher inventory, as well as a drop in Massachusetts mortgage rates, have boosted affordability. Realtors in the Bay State say there are good opportunities for buyers, but some sellers have had homes on the market for several months, even after substantially dropping prices.
- A report released by the Massachusetts Association of Realtors (MAR) showed 11,650 single-family homes were sold in the third quarter of 2006, a drop of 23.4 percent from Q3 a year ago, when 15,211 sold.
- Sales of condominiums statewide, meanwhile, decreased 22.3 percent from a third-quarter record high of 7,124 units in 2005, to 5,538 condominiums sold in the same quarter this year.
The markets experiencing the largest corrections in the state are primarily in the Eastern half, where home prices climbed too high and too fast. The Bay State’s economy has not risen quickly enough to keep pace with the incredible surge in prices, and in turn, more would-be buyers are not able to afford a Massachusetts home loan.
The sales pace from 2003-2005 was unsustainable and unhealthy for the real estate market, and the current climate reflects more normal activity and rather favorable conditions for buyers. Realtors are pointing out that, with much lower prices, more inventory and rates averaging 6.53 percent for a 30-year fixed-rate mortgage, it is a good situation for buyers.
The inventory of single-family homes rose 19 percent in the last quarter over the previous year, but the supply of unsold homes and condominium units may have leveled off between the spring and summer quarters this year, rising less than 1 percent.
This summer, single-family homes were on the market for an average of 116 days, compared with 81 days for the third quarter of 2005. Market time for condos went up from an average of 76 days last year to 111.
Housing sales dropped the most in the southeast portion of the state, down 40.4 percent, while the northeast saw the biggest drop in selling price, off 6.1 percent. Central Massachusetts fell in the middle in each category, with a 25.6 percent decline in sales and 4.4 percent drop in home prices.
Condominium sales fell the sharpest on Cape Cod and the southeast portion of the state, with drops of 33.8 and 36.1 percent. Southeast Massachusetts saw sale prices for condominiums increase sharply, up 25.6 percent from the 2005 third quarter, while prices on Cape Cod and the Islands increased 2.4 percent.