Mass. home, condo sales tumble

Home sales in Massachusetts tumbled 16.6 percent and condominium sales declined 14.3 percent in June, but the dramatic slowdown in sales had little impact on real estate prices.

The median price of a single-family home fell just 1 percent last month, to $370,000, as compared with June 2005, according to the monthly sales report by The Massachusetts Association of Realtors.

Similarly, the median condo price fell 1.1 percent in June, to $283,500, only the second time in the last four years that prices were lower than the same month a year earlier.

Higher mortgage interest rates and uncertainty about the real estate market caused buyers to be more cautious. As homes stay on the market longer, the supply of unsold homes is growing, putting pressure on prices.

``Prices are going to go down -- there's no question about that," said Karl Case, a Wellesley College economics professor who specializes in the housing market. ``The only question is how far and for how long," he said. Continued strength in the economy in coming months will be key to preventing a sharp price declines, he said.

Nationwide sales of existing homes, condos, and town houses also fell in June, by 1.3 percent, to a seasonally adjusted annual rate of 6.6 million units. The biggest drop occurred in the Northeast (3.5 percent), followed by the South (2.3 percent), while sales in the West and Midwest were unchanged.

Massachusetts real estate agents are increasingly discouraged by an unwillingness among clients with properties on the market to lower their listing prices to spark more sales. There were near-record numbers of active listings in June -- 56,494 homes and condos. Many sellers, particularly empty-nesters with no urgency to sell, are holding out for a high price to help them realize the 80 percent price appreciation that occurred in the market between 2000 and 2005.

``In order for sales to begin to edge up," sellers ``are going to have to face reality and adjust their pricing accordingly," said David Wluka, the president of the Massachusetts realtors. ``They have to take the longer view of what the house is worth instead of looking back one or two years."

He predicted prices ``will continue to decline until the inventory gets eaten up."

Adding to the pressure was a 66 percent spike in foreclosure filings against homeowners during the second quarter, as reported this week by ForeclosuresMass Corp., which tracks state Land Court filings by mortgage lenders. John Armstrong, a real estate investor and owner of Sparta Real Estate Research in Acton, said there was one foreclosure filing for every 5.2 homes sold in June. Two years ago, it was one foreclosure filing for every 13 houses sold, he said.

Condo sales have not suffered as much, to date, because first-time homebuyers view them as an affordable alternative to high-priced houses. Between January and June, condo sales were down 5.6 percent from the same year-ago period, compared with 9.2 percent for single families. The condo market appears to be weakening further. The number of active condo listings surged 16 percent over the past year, compared with an 8 percent increase in single-family listings. And the June price drop for condos was the second this year -- prices also fell in April.

Sushil Tuli, the president of Leader Bank, an Arlington lender, has seen some indications that sellers are willing to make more concessions to buyers.

``These numbers have created opportunities for first-time homebuyers," Tuli said.

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