Single-family home sales and median home prices in Massachusetts continued to drop in May, according to a new report by The Warren Group, publisher of Banker & Tradesman. But the rate of decline in monthly median home prices moderated.
There were 3,256 single-family home sales in May, down 13.1 percent from 3,749 a year earlier. Single-family home sales recorded from January through May slid 12.5 percent to 12,128 from 13,857 during the same months in 2008.
"This report shows that home sales are still slow in Massachusetts. In the late 1990s and into the early part of this century, the state was averaging over 5,000 single-family home sales during the month of May. Last month, we saw fewer than 3,300 home sales, making it the lowest sales pace for the month of May in almost two decades," said Timothy M. Warren Jr., CEO of The Warren Group.
The sale of foreclosed properties has become a larger share of the residential real estate market in Massachusetts this year. Bank-owned property sales have made up 7.6 percent of all single-family home sales transactions so far this year. A total of 923 of the single-family homes sold from January through May were owned by banks and other lending institutions, according to The Warren Group. That is an increase from 5.2 percent during the same months last year when only 723 single-family home sales were of bank-owned properties.
The median selling price for homes dipped 13 percent to $280,000 from $322,000 in May 2008. May’s 13 percent decline in median home prices year-over-year is the smallest in the last nine months. The year-to-date median home price retreated 15.1 percent to $264,900 from $312,000.
"Sure, it’s a positive sign that the drop in monthly median home and condo prices year-over-year is the smallest it’s been in months, but prices are still declining. In order for that downward trend to reverse, sales must improve significantly. That won’t happen unless the employment outlook improves dramatically and the tight mortgage lending standards are loosened," Warren said.
Warren also pointed out that distressed property sales put downward pressure on home prices this year. The year-to-date median home price would have been $290,000 – $25,100 higher – without the bank-owned property sales.
Monthly condominium sales and median prices also declined by double-digit percentages compared to a year ago. Condo sales plummeted 22 percent to 1,567 from 2,010 in May 2008. May was the seventh consecutive month that monthly condominium sales were down by more than 20 percent year-over-year. A total of 5,545 condos traded in the first five months of the year, down 26.6 percent from 7,553 last year.
The median condo price slipped 10.4 percent to $257,000 in May from $287,000 during the same month last year. It was the smallest year-over-year drop in monthly median home prices in the last seven months. Year-to-date, the median condo price has fallen 13.3 percent to $235,000 from $271,000.
