James W. Haley – Buyers ‘insecure’

As the overall housing market trudges through the dismal economic conditions, high-end homes in parts of Middlesex County are staying on the market longer and prices are dropping.

Sales of single-family homes and condominiums in all of Middlesex County have steadily declined during the last 2½ years, and if sales statistics from the first half of 2001 are any indication, sales are likely to be lower this year as well.

Home sales were down more than 11 percent during the first half of this year, compared to the same months in 2000. In the first half of 2001, 7,467 condominiums and single-family homes were sold, compared to 8,414 during the same period last year, according to Warren Information Services, a sister company of Banker & Tradesman. WIS collects home sales statistics from the state’s registries of deeds.

Single-family homes sales in the Middlesex communities of Natick, Newton, Framingham, Woburn and Sudbury fell more than 20 percent during the first half of the year as compared to last year, according to WIS.

While unit sales have decreased in Middlesex County and other regions, prices in most communities have risen. In fact, median prices for single-family homes in Middlesex County for the first half of the year have increased 11.2 percent, from $263,500 in the first six months of 2000 to $293,000 through June 2001. Median prices for condominiums in Middlesex County also jumped from $159,000 to $180,000 – a 13.2 percent increase.

One factor leading to fewer sales and higher prices was the lack of inventory, according to Ron Morrison, president-elect of the Northeast Association of Realtors and owner of four ERA franchise offices in Westford, Billerica, Chelmsford and Pepperell.

At the beginning of the year, as more of the high-tech companies along Interstate 495 were expanding, there was a greater demand for homes priced $500,000 and above, said Morrison. That started to change as companies like Lucent Technologies began cutting thousands of jobs.

Now, the buyer pool for the higher-priced luxury homes all along the I-495 belt has shrunk. Further, in mid- to late summer and through the beginning of autumn, more homes started coming on the market as people started realizing they could cash in, said Morrison.

“If you walk into the office now, we can show you 20 or 30 homes over $500,000,” said Morrison. “Back in February, you may have had only five homes [in that price range] to see.”

But sellers may have waited a little too long to get into the peak market. The bigger inventory and shrinking buyer pool for higher-priced homes, means that there is a downward push on home prices.

As Morrison explained, “Sellers tend to miss the market. They’ve all been waiting for the top dollar.”

Still, buyers who think they are going to get a bargain or see prices return to what they were two or three years ago likely will be disappointed. Morrison said a home that sold for $400,000 in the Northern Middlesex County area two years ago, may have sold for $700,000 a little more than a year ago. Today, the price may be in the low $600,000 range – still hefty appreciation overall. Morrison said home prices have appreciated 10 to 20 percent over the last two years.

“It is unrealistic for them [buyers] to think … that the result of waiting is that they’re actually going to get these tremendous price reductions,” said Morrison.

Real estate agents in Middlesex County are still busy, despite the economic woes, according to local Realtors. The only difference is that buyers are taking longer to make the purchase, said Morrison, and homes, particularly those priced higher than $500,000, are staying on the market longer than before.

“We’re just as busy. We’re just having to show more homes to make a sale,” Morrison said.

Over the last six months, single-family homes took at least a week longer or more to sell in Burlington, Concord, Dracut, Lowell and Tewksbury, compared to the same months last year.

In Concord, the average selling time for a single-family home during the last six months was 51 days. Last year during the same months it was 39 days, said James W. Haley of Dick Lepine Real Estate in Dracut, current president of NEAR.

In Burlington, it took about 47 days to sell single-family homes in the last six months, but only 40 days during the same months last year, said Haley.

‘Beginning Stage’
Haley said higher-end homes are sometimes staying on the market 20 to 30 days longer than before and, over the last few weeks, he has started to notice more price reductions than usual.

“We’re starting to feel that buyers are becoming more cautious and more insecure as to what’s going to happen with the economy,” he said.

Haley predicts that year-end sales statistics in Middlesex County will show a 5 percent decrease.

However, homes are selling faster this year in some Middlesex County towns. It took fewer days to sell single-family homes in North Reading and Billerica during the last six months compared to a year ago. In communities like Wilmington, Reading and Bedford, it took about the same number of days to sell single-family homes over the last six months as the same period in 2000.

The multiple interest-rate cuts will be a big help in keeping the real estate market steady, said local Realtors. Morrison said buyers are going to find it hard “to resist” such low rates.

In fact, Morrison is so confident about the future real estate market that he said he is continuing with plans to open two more ERA offices next year.

In Eastern Middlesex County, Realtors are reporting that more homes are for sale in some communities.

Jeanette Tighe, president of the Eastern Middlesex Association of Realtors, said in January there were 252 homes listings in that region of Middlesex County. In September, home listings had almost doubled to 484, said Tighe, who is manager of Carlson GMAC Real Estate in Tewksbury.

In Woburn and Winchester, communities that have struggled with low inventory in the past, there are a lot more homes for sale now, said Tighe.

In Burlington, there are also more homes available for sale. Earlier this year, Burlington had 25 to 30 listings. Today there are about 50 listings, said Beverlee A. Vidoli, president of Vidoli and Associates Realtors in Burlington.

Some Burlington sellers are sensing that buyers are more cautious and reducing prices, but Vidoli said she has not seen a dramatic decrease.

Prices are starting to “level off” for the entire Eastern Middlesex region, said Tighe.

“Sellers now are becoming more realistic about [what] their property is worth,” she said. But, according to Tighe, condominium prices have not dropped at all.

In Tewksbury and Wilmington, some homes are also taking longer to sell. Tighe said she saw a home outfitted with an in-law suite – with two kitchens and two bathrooms – that has been on the market for 45 days. Several months ago, that home would have been snatched up within a week.

Southern Middlesex County communities like Framingham and Hopkinton are experiencing similar trends.

Nelson Zide, one of the broker owners of ERA Key Realty Services in Framingham, said over the last week and a half he has seen an increase in inventory, and homes are staying on the market longer.

Zide said that lack of inventory has led to lower unit sales and increased prices in the past, but considering national statistics that show that people move every five to seven years and the fact that the last four years have been the busiest sales years, the trend will start to change in the next few years as more people enter that five- to seven-year period.

“We may be at the beginning stage where people are ready to move,” he said.