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Mass. sales drop 28%; prices rise slightly.

Byline: Martin Luttrell

After showing steady growth over 12 consecutive months, housing sales in Massachusetts fell sharply last month, even though prices for single-family homes showed modest increases.

Worcester County was one of five counties that saw median prices fall in addition to a decrease in sales volume. Some analysts said the sudden drop in sales was caused by the expiration of the federal homebuyer tax credit.

"It was certainly a bad figure for sales," said economist Alan Clayton-Matthews, professor of public policy at the University of Massachusetts at Boston. "Both for single-family homes and condominiums, on a seasonally adjusted basis, sales are as low as during the depths of the housing decline, at the end of 2008.

"These are certainly sobering sales numbers; however, prices have held up. They have showed continued growth."

There were 3,212 detached single-family homes sold in the state last month, a 28 percent decrease from the 4,463 homes sold the same time last year, according to data released by Waltham-based Massachusetts Association of Realtors. On a month-to-month basis, home sales in July were down 38.1 percent from 5,185 homes sold in June, MAR reported.

Massachusetts single-family home sales decreased 26 percent from July 2009, according to The Warren Group of Boston, publisher of Banker & Tradesman, which tracks real estate and foreclosure data.

The median price of single-family homes statewide climbed 3 percent to $315,000 in July, up from $305,000 a year earlier. This is the second straight month of the year that the median price exceeded $300,000, The Warren Group reported.

The Warren Group and MAR use different methods to collect housing data.

Last month, 452 single-family homes were sold in Worcester County, down 26 percent from 646 in July 2009, The Warren Group reported. The median sale price in Worcester County was $211,750 last month, down nearly 6 percent from $225,000 in July 2009.

The July condominium market was down 33.1 percent compared to the same time last year, according to MAR data. This is the first annual drop in sales since August 2009 and the biggest year-over-year decrease in sales since March 2008, MAR reported.

The Warren Group tracked condominium sales dropping in July, decreasing 32 percent from a year earlier. A total of 1,484 condos sold in July, down from 2,185 a year ago.

In Worcester County, the median price for a condo was $169,950 in July, up 1.77 percent from $167,000 in July 2009, The Warren Group reported. Statewide, the median price of condos increased 2.7 percent, from $277,500 a year ago to $285,000 last month.

Timothy M. Warren Jr., chief executive officer of The Warren Group, said the housing market seemed to have gained some momentum with the tax credit, and last month's numbers were a surprise.

Under the federal stimulus program, first-time homebuyers had been eligible since early last year for a tax credit with a maximum of $8,000. In November, repeat homebuyers were made eligible for a maximum $6,500 tax credit. Under the provision, those homebuyers had to sign an approved purchase and sale agreement by April 30 and close by Sept. 30.

"I guess we expected it could happen," Mr. Warren said of the sales decline. "I was surprised. That was a pretty big number. I would say the primary cause is the end of the tax credit. Consumer confidence in recent months is not as robust as the first quarter of the year, when the stock market was going great, and we were seeing numbers that looked like the recession was over.

"But we're not creating jobs. I sense a little nip in the air on the state of the economy and how long we may have a jobless recovery."

Mr. Warren said it is not unusual for housing sales volume and prices to head in different directions. "Prices typically lag," he said. "Both measures of the market don't turn at same time."

He said the market could be uneven through the rest of the year, but will probably show as many sales as 2009, with slowly climbing prices.

Mr. Clayton-Matthews said the main question is how the market will do over the final third of the year, with the peak selling season already past.

"It's the national economy that is going to determine the future course of the housing market," he said. "In the recovery, so far the state has had a much stronger recovery in jobs and earnings and spending. That can't continue if the national economy is weakening. The rest of our country is our biggest customer in terms of the goods and services we have."

ART: CHART; MAP

CUTLINE: Massachusetts home sales

PHOTOG: T&G Staff
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Publication:Telegram & Gazette (Worcester, MA)
Date:Aug 25, 2010
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