Massachusetts Housing Market Slumps… Again
Hopes for a spring turnaround in the slumping Massachusetts housing market haven’t panned out, with May home sales declining sharply.
A publisher of real estate data on Tuesday reported a 9 percent drop in sales of single-family homes in May compared with the same month a year earlier.
A report from the Massachusetts Association of Realtors showed a slightly more modest 7.5 percent decline, even as lately, Massachusetts mortgage costs remain relatively low.
The reports both showed declining home sales and Massachusetts home prices through the first five months of the year.
The Warren Group, which counts for-sale-by-owner transactions and certain other sales not included in the Realtors’ numbers, put the year-to-date decline at 3 percent, compared with 1 percent for Realtors.
Either way, a state housing market that endured a sharp downturn last year isn’t showing signs of a turnaround entering this year’s busiest sales season.
May’s sharp sales decline “is a pretty good indicator that overall, for home sellers and real estate professionals, this hasn’t been the spring they were hoping for,” said Terry Egan, editor in chief for the Boston-based Warren Group.
Nevertheless, the rate of decline is easing after 2006’s retreat from years of double-digit increases in Massachusetts home prices.
Massachusetts saw faster home price appreciation than any other state in the nation from 1980 through last year, according to federal data.
- In May, the state’s median price for single-family homes stood at $315,000, compared with $330,000 a year ago.
- That marked a 4.6 percent decline, compared with the 5.8 percent drop in 2006 compared with 2005.
- The Realtors, meanwhile, reported a median home price of $355,000 in May, up less than a percent from the year-ago median of $352,700.
The state’s condo market posted stronger May numbers than single-family homes, with the Warren Group reporting a sales dip of 2.1 percent and a 3.5 percent drop in median price.
The Realtors reported condo sales flat from a year ago, when Massachusetts home loan demand started to cool off, with the median price up 1.4 percent.
If there’s any sign of a turnaround in the state’s housing market, it’s the shrinking glut of homes for sale. The Realtors’ group reported a 9.5 month supply of homes for sale in May, down from 11 months of supply in May of 2006 and 15 months last September.
“Inventory levels are working themselves down, and we’re going to come into balance sooner or later,” said Doug Azarian, president of the statewide Realtors’ group.
The Warren Group’s Egan said the falling inventory of homes for sale isn’t necessarily an indicator of a turnaround.
Many sellers who don’t need to move immediately have taken their homes off the market in hopes of gaining a better price by waiting a year or two.
Meanwhile, many prospective buyers may be reluctant to make offers because a recent rise in mortgage rates has increased borrowing costs.
Lenders have tigthened their standards in response to large inventories of homes for sale and the recent crisis in the bad credit mortgage market for buyers with tainted credit histories.
Nationally, the housing market remains in a slump. On Tuesday, the Commerce Department reported sales of new homes fell for the fourth time in the past five months.
SOURCE: Associated Press