BOB CHURCHILL
‘A normalized market’

The housing market appears to be nearing the end of 2006 on a down note, but local Realtors say they are seeing signs of stabilization as the number of for-sale homes began to shrink this fall. Still, single-family home and condo sales across Massachusetts sank by double digits in November, with single-family home sales hitting the lowest figure for that month in more than a decade.

Some 4,130 single-family homes were sold in November, down 13.4 percent from the same month last year, according to The Warren Group, parent company of Banker & Tradesman. This November’s sales were the lowest for that month since 1992, when only 3,739 units were sold. A total of 50,136 homes were sold from January through November, down 15 percent from the 58,944 unit sales recorded a year earlier.

Meanwhile, the median price for single-family homes sold during the first 11 months of 2006 dropped 5 percent to $327,500 from $345,000 during the same period in 2005.

The once-booming condo market also continued its downward slide last month. Condo sales statewide dropped 10 percent during the month of November. A total of 27,831 condos were sold through November – 13 percent below a year earlier, according to The Warren Group. The median price for condos, $275,000, is off 1.3 percent from last year.

“What we’re seeing now and what we will see in the future is a more normalized market in terms of purchases and sales being a function of actual lifestyle changes instead of speculation,” said Bob Churchill, a buyer’s agent who is president of the Cape Cod & Islands Association of Realtors. “I’ve seen several of these cycles and when it gets widely speculative the adjustment is bound to come.”

Home sales on Cape Cod have plunged 22 percent so far this year – the sharpest drop in single-family homes sales behind Nantucket, which saw unit sales plummet 29.5 percent. A total of 3,559 single-family homes were sold in Barnstable Country through November, according to The Warren Group, down from 4,561 a year earlier.

Churchill said this year there was a disconnect between buyers – who were reading and seeing a flood of news reports of a housing downturn – and sellers, who were buoyed with high expectations from the surge in home prices over the last few years.

Keith Bradley, another Cape Cod Realtor, said while unit sales have dropped dramatically, there hasn’t been a significant drop in home prices. The median price for single-family homes sold on Cape Cod from January through November dipped 2.6 percent to $370,000.

“Compared to the appreciation over the last five years, [the price drop is] really minimal,” said Bradley, an agent with The Real Estate Co. in Chatham.

‘Near the Bottom’

With the number of homes for sale jumping in most parts of the state during various points in the year, buyers weren’t feeling the urgency to make a purchase quickly, according to local brokers. In some towns, the inventory of unsold homes doubled.

“We didn’t have that in 2004 or 2005. If you had a buyer, you would show them three homes and tell them to pick one. This year you had 40, 50 or 60 – and [buyers] knew if they waited a week, another five or 10 would come” on the market, said Nelson Zide, senior vice president of Whitinsville-based ERA Key Realty Services.

But Zide said in the last few weeks, with the holidays approaching, a number of sellers have taken their homes off the market in the MetroWest region, resulting in a shrinking supply of for-sale homes.

Zide took a Framingham home priced at $589,000 off the market in late October. When he listed the home six months earlier, there were about 30 homes in Framingham listed for sale in the $500,000-to-$600,000 price range. Now there are only about 10 homes listed for sale in that range.

In fact, Zide said the number of for-sale homes in MetroWest communities in the fourth quarter has been the lowest it’s been all year. “I think we’re near the bottom. From what I’ve seen in the last quarter, the people seem to be out there buying a little more. You won’t see those closings until January, February or March,” said Zide.

Zide’s firm serves several communities in Worcester County, which saw home sales through November fall 17.3 percent compared to a year earlier. The median price for single-family homes sold during that period decreased 6.4 percent to $252,650 from $270,000 during the same timeframe in 2005.

In Essex County, single-family homes fell 18.3 percent in the same months, while in Middlesex and Norfolk counties sales were off almost 15 percent. The median price for a single-family home in Essex County fell 5.7 percent to $357,500 during those 11 months, while in Middlesex County the median price was down 3.5 percent to $410,000 and in Norfolk County the price fell 3 percent to $399,900.

Some real estate professionals, including Zide, said they think the housing market is nearing the bottom of the downturn.

“I think we’re there – and if we’re not there, we’re not far away from the bottom,” said Richard Cahill, president of Norwell-based Jack Conway & Co.

Cahill said there are fewer homes available for sale, with some homeowners taking their homes off the market, and buyer activity started picking up earlier this fall. He noted that Jack Conway & Co.’s November sales were actually more than 6 percent higher than the same month in 2005.

“Somewhere in October we started to see more buyers than we were seeing before. I think what happened was they were sitting around for two years and waiting on the sidelines,” he said. “But if the value is there, the buyer is going to buy. The homeowner has to realize that he has to present something that says ‘buy me.'”

Robert Byrne, group president of the Wellesley-based Century 21 Commonwealth Group, also sounded optimistic last week. Byrne, who runs the firm’s Needham office, said home sales in Needham are actually higher this year than in 2005, and the median selling price for single-family homes sold through November, $645,000, is just slightly below the $649,000 median price of a year earlier.

“What I’m starting to see in our market area is that we’ve turned the corner,” said Byrne, who noted that his company had an “excellent November.”

“I think buyers who have decided to make purchases in the last year really made a wise decision. With interest rates staying low and prices moderating, they bought more house for their money,” he said.