Housing prices in Mass. decline again
Foreclosed homes sold by banks add downward pressure
Massachusetts housing prices continued to fall at a double-digit rate last month as foreclosure sales put downward pressure on the market, according to new data released yesterday by the Warren Group, a Boston firm that tracks real estate.
The median selling price for single-family houses in May dropped 13 percent to $280,000, from $322,000 in May 2008. From January to May, the median price slumped 15.1 percent to $264,900, compared with $312,000 at the beginning of the year. But excluding bank-owned property sales, this May’s median price would have been $290,000, according to Warren Group.
The latest drop comes as the inventory of foreclosed properties has swelled. Bank-owned property sales made up 7.6 percent of single-family house transactions between January and May, up from 5.2 percent during the same period last year.
Despite the fall in median prices, there is evidence that price declines may be slowing. May’s 13 percent drop was the smallest in nine months. In April, the median selling price fell 13.1 percent from the same month a year earlier.
Timothy M. Warren Jr., Warren Group’s chief executive, said sales must improve significantly before prices start to go up.
“Prices are still declining,’’ Warren said, and sales volume won’t increase significantly “unless the employment outlook improves dramatically and the tight mortgage lending standards are loosened.’’
Instead, sales volume continued to plummet in May. There were 3,256 single-family house sales last month - the lowest sales pace for May in almost 20 years, Warren Group said. From January to May, single-family house sales slowed 12.5 percent from the same months in 2008.
Sales slowed dramatically - by more than 50 percent - in many of the more expensive communities, including Brookline, Cam bridge, Weston, Wellesley, and Newton.
Nicolas Retsinas, director of Harvard University’s Joint Center for Housing Studies, attributed the slowdown to sellers who are not willing to drop their prices enough to attract buyers.
“A lot of people in Cambridge and Wellesley are probably not in a situation where they have to sell,’’ Retsinas said. “If they don’t have to sell, they are not going to lower the price.’’
Some communities, including Milton, Natick, and Acton, saw median prices rise by double digits in May. And several towns on Cape Cod and the islands, including Falmouth and Chatham, bucked the sales trend by registering an increase this May, compared with a year before.
Ross A. Joly, owner of Coldwell Banker Joly, McAbee and Weinert Realty in Yarmouth Port, said he’s seen increased activity this spring. “Coastal pockets are very strong,’’ Joly said.
Jenifer McKim can be reached at jmckim@globe.com. 
