The phrases “low inventory,” “rising prices” and “seller’s market” have been rolling off the tongues of Realtors for the past few years like a skipping record, and data from the first half of 2000 shows those phrases to still ring true. But according to at least some experts in the Massachusetts real estate industry, the state’s red-hot real estate market may finally be showing signs of cooling off.

According to statistics compiled by Warren Information Services, a sister company of Banker & Tradesman, the number of non-condominium residential real estate sales statewide totaled 44,166. That number is 8.3 percent lower than figures from January to June of 1999.

Conversely, the median sales price of those same residential units increased by 12 percent so far this year to $181,400 statewide.

Trends in the condominium market echoed those in the non-condo arena, as the number of condos sold in Massachusetts through June of 2000 totaled 10,712, down 3.2 percent from the same period in 1999. The median sales price, on the other hand, rose 12.2 percent to $143,562.

Statistics are compiled from closed transactions recorded at Registries of Deeds statewide and include both Realtor and non-Realtor transactions.

“The decreased volume of sales is due to the fact that people are not selling their homes,” said Shari Marquis of Marquis Real Estate/GMAC in Brighton and president of the Greater Boston Real Estate Board’s Residential Association of Realtors. “They’re not selling because they have nowhere else to go. We’ve had this shortage for the past four years.”

Marquis said the shortage could be attributed to large blocs of people finally being able to enter the homebuying market.

“The Baby Boomers’ babies are now at the age where they’re buying homes,” she said, “and in the ’90s we had the largest influx of immigrants we’ve had in the past 40 or 50 years, and for them homeownership is a high priority because it’s the biggest part of the American dream.

“Now the people who came here in the early ’90s, who have been working towards owning a home for a few years, can now afford to buy one,” she added.

The median non-condo price in Suffolk County was $220,000, up 24.3 percent from last year. Sales volume was down 7.9 percent to 2,351. Condo sales were down 5.4 percent to 2,307 while the median condo price was up 22.2 percent to $204,000. Middlesex County non-condo sales were down 10.5 percent to 8,270 while the median price was up 14.2 percent to $265,000. Condo sales fell 1.4 percent, meanwhile, and the condo median price rose 13.1 percent, to $160,000.

Through June of this year, Norfolk County non-condo sales were down 6.3 percent from last year, but the median price was up 16.7 percent to $252,000. Condo sales were down 7.2 percent but the median price was up 9.6 percent to $153,500.

Plymouth County non-condo sales were down 7.9 percent while the median jumped 13.3 percent to $169,000. Condo sales dropped just 0.2 percent while the median price rose just 2 percent to $102,000. Bristol County’s non-condo sales dropped 8.2 percent while the median price rose 7.7 percent to $140,000. Condo sales in Bristol County were up 1.5 percent while the median price was up 12.1 percent to $106,500.

Essex County’s non-condo and condo sales fell by 17.6 percent and 9.8 percent respectively, while the median prices rose 18.6 percent to $210,000 for non-condos and 14 percent to $135,650 for condos. Statistics for Essex County are through June 23.

‘Normal Reaction’
Paul J. Harrington, president of Lexington-based The DeWolfe Co., said he expects the sales drop-off to be more significant in the second half of the year, which should bring a better balance to the market.

“If you look at what’s happening in the market today, there is a bigger drop-off in the number of properties under agreement, so it will be more significant when those fewer transactions close in the coming months,” he said.

“What we saw is that the market began to turn in April, and began to move away from a strong seller’s market to a more balanced market. Overall, the market has returned to a more normal level.

“I think when you see the closed number of transactions over the next three months, there will be a 10 to 15 percent drop in volume, and prices and appreciation will slow now that the market has turned,” he said. “It’s a normal reaction to a heated market.”

Fred Meyer of University Real Estate in Cambridge and president of the Massachusetts Association of Realtors said he was surprised the number of sales had not dropped further because of dwindling inventories. The number of listings, he said, has fallen by anywhere between 20 and 25 percent.

As an example, a spokesman at the state’s largest multiple listing service, MLS-Property Information Network, said on a recent July day the Boston area had 3,800 listings, compared to 7,000 at the same time last year; Worcester had 2,200 listings compared to 3,200 last year, and the North Shore had 1,500 listings compared to 2,000. The decline could be attributed to both lack of inventory and the shorter length of time listings stay active because they are sold faster.

As for the increase in median price, Meyer said it was difficult to attribute that rise to one cause. “Sales of homes over $500,000 have increased significantly,” he said. “So it might not be inflation but a change in the mix of what’s sold … My suspicion is it’s elements of both.”

As has been the case in the past, trends in the 413 area code have differed from the rest of the state. The four westernmost counties saw either an increase or only a slight decline in number of sales, while median price increases were much less steep than in the east.

From January to June of 2000, Berkshire County saw a 5.2 percent increase in non-condo sales, and a 4.5 percent median price increase to $104,500 from the same period in 1999. Condo sales were down 6.5 percent with the condo median price up 13.4 percent to $127,000. Franklin County saw a 12.3 percent increase in non-condo sales with no changes in condo sales. Median prices were up 5.3 percent to $100,000 for non-condos and were down 20.9 percent to $81,500.

Hampden County saw a decrease in non-condo sales of 0.2 percent and median price increase of 6.4 percent to $100,000. Condo sales volume was up 18.7 percent and condo median price was up 6.7 percent to $80,000. Hampshire County saw a 0.9 percent decrease in non-condo sales volume with the median price rising 8.9 percent to $135,000. Condo sales were down 14.6 percent, with the median price up 1.8 percent to $114,000.

Worcester County saw non-condo sales fall 7.3 percent and condo sales rise 4.3 percent. The median non-condo price rose 7.7 percent to $140,000 while the condo median jumped 14.4 percent to $107,500.

The Cape & Islands saw significant median price increases for the first half of the year. Barnstable County’s non-condo sales volume dipped 10 percent from last year’s first half while the median price jumped 19.7 percent to $170,000. Condo sales were down 16 percent but the median was up 31.5 percent to $131,500. Dukes County non-condo sales were down 18.9 percent while the median rose 27.7 percent to $249,000. Condo sales for the county dropped 37.1 percent. The median condo price was $130,000.

On Nantucket, non-condo sales were down 4.3 percent while the median price was up 39.9 percent to $479,000. Condo sales are half what they were last year, though the median price is up 34.2 percent to $349,000.

“Smaller starter homes are harder to find and are appreciating more, and so are condos,” said Richard F. Martin of Dick Martin & Assoc. in South Yarmouth and president of the Cape Cod & Islands Association of Realtors. “It may be that prices are getting to the point where people can’t afford things.”

Meyer said the strong economy and the limited number of new units being added to the housing stock are both contributing to the heated market.