Mass. home sales fall in June
The spring real estate market was a washout.
Home sales in Massachusetts tumbled as much as 8 percent in June, and prices also dropped during that key month in the real estate cycle, according to two reports yesterday, virtually ensuring that 2007 is going to be another down year in the industry.
"We're going to be on a continued decline at least through the end of the year," said Alan Pasnik, the real estate analyst for Warren Group, a Boston property research and publishing firm. "I don't see what's going to change that," given June's poor results, he added.
June is a key month because deals struck in the spring are usually closed then.
Warren Group reported yesterday that home sales in June dropped 8.3 percent from the same month in 2006, and prices fell 4.6 percent, with the median home price at $334,000.
Separately, the Massachusetts Association of Realtors reported sales fell 6 percent, to 4,959 closings last month, compared with 5,276 in June 2006, while the median single family home price fell 1.6 percent, to $364,000.
The results differ because the realtors group tracks only transactions that involve a broker while Warren Group draws from the larger database of court-recorded sales, which include those sold directly by homeowners.
The condominium market wasn't spared either. The realtors association, for example, reported condo sales dropped 3.6 percent, though the median price increased 4.4 percent, to $296,000. In contrast, Warren reported a 12.3 percent decline in condo sales and a 4.1 percent drop in the median price, to $280,000.
With half of 2007 gone -- and the more important half for the real estate market -- home sales so far are 4.3 percent below 2006, according to Warren Group data. The realtors group said sales declined 2.1 percent in the first half.
The real estate market has been unable to withstand simultaneous hits from rising mortgage interest rates, growing foreclosures, and continued fallout from a six-year housing boom that pushed prices in Massachusetts to record highs, making them unaffordable for more homebuyers.
Kathy Cyrier, an agent with Prudential Howe & Doherty Real Estate in Andover, where sales have held up better than in most locations, noted the home prices are not as soft as the drop-off in sales might indicate.
"The prices have adjusted downward -- not significantly, but over 2006."
Interest rates add pressure to prices, however. The average rate on 30-year fixed-rate mortgages was 6.88 percent, a one-year high, HSH Associates reported in its weekly survey of more than 2,000 lenders nationwide. Higher rates result in larger monthly payments for a house at the same price. Analysts said the nation's foreclosure crisis is dampening demand, because lenders are being tighter in extending credit to homebuyers.
Pat Magnell, a buyer's agent for Buyers Choice Realty in North Andover, said sales activity was stronger inside Route 495 than outside the beltway. Buyers responded to price reductions in suburbs that are closer to Boston or the high technology corridor because they are more appealing to commuters, she said.
Kimberly Blanton can be reached at blanton@globe.com. 