Massachusetts Housing Market Still Taking a Breather
Have we or have we not hit bottom?
That continues to be the real estate question of the hour (day, month, or year) in Massachusetts.
Whether one wishes to term it a correction, leveling out, or simply a return to normalcy, 2006 was a sobering year for professional real estate agents and mortgage brokers across the country.
Total existing home sales - detached single-family units and condominiums - were down 10.1 percent in the U.S. for the fourth quarter of 2006 compared with the fourth quarter 2005, according to numbers released last week by the National Association of Realtors.
“This information confirms 2006 was the year of contraction,” said NAR chief economist David Lereah, coining yet another variation on a theme. “And hopefully the fourth quarter was the bottom of this current cycle.”
In the Northeast as a whole, fourth-quarter house and condo sales dropped 6.6 percent from 2005-2006. The Massachusetts Association of Realtors on Friday also came out with its own end-of-the-year bad news. According to the association, Bay State home sales decreased 14.6 percent in 2006.
As Massachusetts mortgage costs grew many times faster than the personal incomes that make the payments, condo sales in Massachusetts in the same period were off by 12.1 percent.
The MAR’s South Shore region, which includes both Taunton and surrounding towns, accounted for 14.7 percent fewer single-family homes and 9.7 percent fewer condo units sold in 2006 than that of the previous year.
In a trend indicative of the Massachusetts housing market as a whole, the median selling price of a single-family home in the South Shore declined 3.4 percent in 2006, from $364,000 to $351,500, while condo prices also fell, but less so - from $259,900 to $253,750, or 2.4 percent.
Asked to predict when the market might hit bottom - the symbolic point when sellers’ asking prices have fully adjusted to market conditions and begin to rise again, some experts refuse to speculate.
“Oh boy, I have no idea,” said Gail Carter, president of Gail Carter Realty in Assonet.
Despite the recent numbers, she said not all is doom and gloom of late, with condo market activity remaining fairly vibrant from Fall River to Taunton.
Attractive home loan rates continue to be something of a motivating saving grace for buyers to act. As of Friday the average U.S. 30-year fixed-rate on a home loan was 6.32 percent, just 0.01 percent higher than the week before, according to Bankrate.com.
“It’s still a very good time to buy,” said Doug Azarian, MAR president and owner of Century 21 Dream Homes in North Falmouth.
One good sign for Realtors and real estate agents in general, said Azarian, has been a diminishing inventory of homes and condos that remain unsold, an indicator that some sellers are having more success.
He said whereas inventory levels are now averaging 10-11 months, in August and September they were in the range of 15-16 months. But there’s still a ways to go in that respect. He said 7-8 months’ worth of inventory is considered more indicative of “a balanced market.”
Things could be worse, of course. In all, 2006 turned out to be the third best year on record for home sales in Massachusetts.
But the record sales and mortgage loan activity of 2001 to 2004, officials caution, should be considered a thing of the past.
SOURCE: Taunton Gazette