Mass. home prices fall in September

The median price of a single-family house dropped for the first time in seven months as the pace of home sales weakened across Massachusetts in September, according to the monthly market report yesterday from the Massachusetts Association of Realtors.

The median selling price for a single-family house was $360,000 in September, down 4 percent from $375,000 in August. That was the first monthly price drop since February, though prices were still higher than they were a year ago. The number of single-family home sales that closed in September was 4,464, roughly equal to year-ago sales.

In the state's growing condominium market, the median sale price also declined, by 6.1 percent, to $270,000 in September from $287,500 in August. But strong sales continued: Buyers purchased 22 percent more condos than a year ago, a much stronger year-over-year increase than in recent months. Year-over-year comparisons of home sales are more valid than month-to-month numbers, real estate analysts say, because sales volume is highly dependent on weather and other seasonal factors.

A fall in housing prices comes at a time when real estate agents, especially in the suburbs, are increasingly reporting that clients who are reluctant to reduce their asking prices are not able to sell their homes in a softening market in which the number of houses on the market has spiked. The data tracked by the realtors association can lag the market by several months, since it includes prices only on sales that have closed, and it can take two to three months between the time a purchase-and-sale agreement is signed and the deal closes.

''The past three years have been really good for real estate," said Jim Dangelo, an agent for Century 21 Travis Realty in Billerica. ''Now we're starting to hit a low period," he said.

Nationwide, September existing-home sales were flat compared with August, according to the National Association of Realtors, with homes selling at an annual pace of 7.3 million. But existing-home sales in the Northeast held up better than some regions of the country, increasing 0.8 percent last month, second only to the 3.7 percent rise in sales in the South, where Hurricane Katrina sparked sales in the areas that escaped the heaviest damage. Sales in the Midwest and West declined.

Economists and housing analysts blame a slowdown on rising oil prices, which are causing jitters about the US economy, and an uptick in mortgage interest rates. Mortgage rates tracked by Freddie Mac, which buys home loans from financial institutions, have risen above the 6 percent mark for the first time since March. The rate on a 30-year fixed-rate mortgage was 6.1 percent last Thursday.

Still, Massachusetts sales volume, which is slightly above a year ago, ''shows a pretty strong number to me," said Maggie Tomkiewicz, president of the Massachusetts Association of Realtors, noting 2004 was a record for sales in Massachusetts. ''We're returning to a more normal market, and we expected that would happen. It may look like it is not a good market but it is a good market, in a normal sense rather than a frenzy."

Alan Pasnik, an analyst for The Warren Group, a Boston firm that publishes reports on the real estate market, said Massachusetts home prices may have dropped in September, because buyers with children typically push to close on their purchases in August, before the schools open in September.

''There's a premium to getting the sale done earlier," he said.

Pasnik acknowledged prices have been weakening for months. ''That's not news to anybody," he said. ''There's more housing inventory, and that's going to put downward pressure on prices."

Jason S. Weissman, president of Boston Realty Advisors, a residential and commercial brokerage firm, said he believes that buyers anticipating more price declines are holding off on decisions, and they are able to do so because there are so many properties on the market.

''The buying process is very psychological," he said.

Slowing suburban home sales are, in turn, having an impact on condo sales, he said.

''We're not going to have a banner year," Weissman said. ''Volume will be off in 2005 and 2006 from 2004."

Listing Information Network reported this week that condo sales in downtown Boston were 3,132 during the first nine months of this year, or 12 percent below record sales during the same time last year.

The report was the first evidence that a slowing housing market was also hitting condo sales in the city, which is in the midst of a condo-building boom.

Condos ''are definitely not selling at the pace at they were, and sellers motivated to sell are definitely reducing their price," Weissman said.

Kimberly Blanton can be reached at blanton@globe.com.